Feature Story

Providing for your lifestyle after work just got easier

For most of us, this means making additional contributions to our super on top of the 9% our employer normally contributes.

The good news is that providing for your lifestyle after work doesn’t necessarily mean compromising on your lifestyle today. In fact, you could be eligible for substantial taxation or financial benefits by contributing even a little extra to your super today.

Are you earning more than $58,980 p.a.?

If this applies to you, then contributing to your super from your before-tax salary (otherwise known as salary sacrifice) could reduce your taxable income by the amount you contribute, and your contributions will only be taxed at 15%.

By taking advantage of this benefit, you could be providing for your lifestyle after work without making a huge difference to the amount of income you take home.

Are you earning less than $58,980 p.a.?

If this applies to you, then making an after-tax contribution towards your super means you could be eligible to receive up to $1,500 per year towards your super as a government co-contribution, depending on the amount you contribute and your income. You can choose to make a lump sum payment or smaller regular payments to fit within your budget. Even $1,000 per year, which equates to the cost of one cup of coffee a day, can dramatically affect your super savings.

Example:
Greg is 25 and earns a salary of $37,000. He decides to bring his lunch to work twice a week. If he added the savings of $1,000 per year (after tax) into his super, not only is Greg eligible for a $1,100 bonus co-contribution from the government, but after 35 years he’ll have an extra $132,742 (in today’s dollars) in his account.

Compare your options online?

Our Contribution Optimizer online calculator can help you investigate how making contributions to super, before-tax and after-tax, can affect your take home pay and your net contribution to super.

Assumptions: Salary increase with salary inflation: 3.5% p.a.;Member post tax contribution of $1,000 is made throughout the 35 years until retirement.;Minimum salary threshold for co-contribution indexed with salary inflation: 3.5% p.a.;Average rate of inflation: 2.5% p.a.;Average rate of investment return (net of tax and administration fees): 7.5% p.a.

Need more info?

The fastest and easiest way to add to your super savings

Using internet banking you can BPAY contributions to your account 24 hours a day, seven days a week. Simply use our 646596 biller code and your personal customer reference number which you can access by logging in or calling our helpline on 1800 555 667

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Achieve is issued by Russell Investment Management Limited (‘RIM’), ABN 53 068 338 974, AFSL 247185. Achieve provides general information only and does not have regard to your objectives, financial situation or needs. Before making an investment decision, you need to consider whether this information is appropriate to your objectives, financial situation and needs. The information has been compiled from sources considered to be reliable, but is not guaranteed. Past performance is not a reliable indicator of future performance. Total Risk Management Pty Ltd ABN 62 008 644 353, AFSL 238790 (‘TRM’) is the trustee of the Russell SuperSolution Master Trust ABN 89 384 753 567 (‘Russell SuperSolution’) and the issuer of the Product Disclosure Statement (‘PDS’) for Russell SuperSolution. Any potential investor should consider the latest PDS in deciding whether to acquire, or to continue to hold, an investment in Russell SuperSolution. The PDS is currently available by visiting www.russell.com.au or by phoning 1800 555 667. RIM and TRM are part of the Russell Investment Group (‘Russell’). Russell or its associates, officers or employees may have interests in the financial products referred to in this magazine by acting in various roles including broker or adviser, and may receive fees, brokerage or commissions for acting in these capacities. In addition, Russell or its associates, officers or employees may buy or sell the financial products as principal or agent. You may contact Russell on (02) 9229 5111. MKT/1657/0308

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