Saving for retirement

Retirement might seem like a long way off, but there are a number of options available to make your superannuation work even harder for you.

Taking the time to investigate these options and perhaps arranging to contribute as little as $10 per week now could make all the difference to your lump sum in 30 years. And, you may be entitled to tax benefits along the way so consider the benefits of:

Personal contributions - Making voluntary contributions to boost your superannuation account means you have a higher balance earning interest on a daily basis. Multiply that over years and the result can make a substantial difference to your superannuation lump sum on retirement. It takes as little as $10 per week to make a big difference to your entitlement in 30 years. These contributions can be made as often as you like and there are no fees for paying into your Auswide account.

Rollovers - If you've been working for a few years and have changed jobs a few times, chances are you have more than one superannuation account. This means a number of small balances could be eroded by administration fees and charges. These accounts can be consolidated into one fund, which means you'll only be paying one set of administration fees. Auswide can help you roll your accounts into one, even taking care of all the paper work for you!  Auswide recommends that you consult your financial adviser before taking action.

Co-contribution scheme - If you earn up to $61,920 per annum you may be eligible for the Government Co-contribution scheme which can add even more to your savings.

With this scheme, the Government will contribute $1.00 for each $1.00 of personal contributions made in a year if you earn up to $31,920, to a maximum of $1,000. This maximum co-contribution then reduces at a rate of 3.33 cents for every dollar of income over $31,920, and cuts out at $61,920.

Salary sacrifice - If your income places you in a higher tax bracket, you may find advantages in salary sacrificing a portion of your pre-tax salary to your superannuation.

Salary sacrifice contributions are arranged between an Employer and Employee, whereby the Employee gives up part of their pre-tax salary as a superannuation contribution. This type of contribution cannot be released until retirement. One of the benefits is that contributions are taxed at 15% rather than your marginal tax rate.

Voluntary Employer contributions -Your Employer can make voluntary contributions on your behalf as an added benefit of employment. These discretionary contributions have limits, but the amount is tax deductible for the Employer.

Choice of Fund - Choice of Fund is a Federal Government initiative giving millions of Australian workers more control over their superannuation. From 1 July 2005, many Employees will be able to choose the superannuation fund into which their Employers' Superannuation Guarantee contributions are paid. These contributions are calculated at 9% of your gross salary.  To find out if you are eligible for Choice please click here.

Choosing Investment Options - When it comes to choices we each have individual needs and personal criteria for selecting the Investment Options that are right for us. As you are still some way off from retirement, you may like to take some higher risks with your investments in search of an extra one or two per cent return every year, which over 15 or 20 years can make a significant difference to your retirement benefit. 

You can find a detailed description of Auswide's Investment Options by downloading the Investment Strategies PDS.