Women need to put in more effort to maximize their retirement income. It is important to make the most of your super fund. Women have less than half of the retirement savings that men do due to lower salaries, timeouts, and interrupted employment. According to the Association of Superannuation Funds of Australia, 47% of women who are single fund their retirement better than 78% of men. According to the Australian Bureau of Statistics, the average super account balance of women between the ages of 54 and 65 is $180,000. For men, it is $322,000. This is a worrying figure.
How can women get the most out of their super fund? Here are a few tips that women should keep in mind for a smooth retirement.
The first step towards a successful retirement is to plan. You can never be too prepared to plan so that you are ready to retire early if the time comes. The upcoming changes in super rules, which will take effect from July 2018, will help women catch up on their tax-deductible super contributions.
Plus, instead of having a cap on contributions at $25,000 per year, people can roll over their cap for up to five years. Women need to have their own homes as part of the planning process.
#2 Check For Unclaimed Money
Another important step is to find unclaimed funds, especially if your money has been lost over the years. Money can be easily lost over time if it is not claimed. Women are more likely to be affected by this, as they face both personal and professional challenges. Ensure that you receive the full amount of your super fund. This is the best method to maximize the funds.
#3 Review Your Investment Portfolio
You can make sure your super fund will work for you at retirement if you invest it properly. Track where your money is going and if it’s the right thing for you, depending on your age, life stage, and risk attitude. You can choose a “growth option” if you have plenty of time until retirement. This will give you greater exposure to property and shares. It will carry a greater risk but also offer the potential of higher returns in the long term. If you are closer to retiring, you might choose a more conservative strategy.
You can use your salary to buy a super.
Every investment is important. If your employer is okay with it, you can add a little bit more to your super by using the pre-tax income each pay period. It is an effective way to boost your super balance, as the money that goes into the account will be taxed at the minimum 15% rate and not at the normal tax rate. Even if you can’t make regular contributions, a single after-tax payment will help boost your wealth. If you were to top up your super by $500 per year, you would have around $178,000 when you reach 67. This is a nice amount of money.
#5 Consider Spouse Contributions
Contributions from salary after tax can be used to supplement super savings. Contributions are possible at any stage of your working life. It is important to benefit from the lower rates of tax on super. The return on investment will depend on factors like retirement age, the number of years until retirement, your lifestyle after retirement, and your level of savings. Contributions after-tax to your spouse’s fund can also help you save for retirement. If your spouse’s assessed income and reported fringe benefits are less than $10,800 per year or nil, you can receive a tax offset of 18% on $3,000 of contributions. The maximum rebate is $540. If you are a stay-at-home parent or earn a low income, your spouse’s gifts may make a big difference. Spouse contributions are split with the super fund if the fund allows it.
#6 Take into consideration government co-contribution
You may qualify for a co-contribution from the government to your fund, depending on your income. If you make your contribution after taxes, the Australian government will co-contribute. The government will contribute 50 cents to every dollar you pay up to $500.
The conclusion of the article is:
There are many ways you can make the most out of your super fund, from concessional contributions to co-contributions by the government to splitting spouses’ gifts to consolidating it. Superannuation is a great way to ensure that your retirement years will be a wonderful experience. The most important thing to remember is the age pension. It’s the primary source of income for nearly three-quarters of retired people. Also, good advice from a financial advisor.