Did you know it’s likely you’ll spend up to two decades or more in retirement? It’s a long time, so will you be able to afford all the things you’ve thought of doing in retirement, before your savings run out?

By starting now and making small changes to how you approach your super savings, you can get closer to the retirement you’d like – and hopefully make your savings last longer.

1. Consider consolidating your super funds

If you’ve moved jobs or done casual work over the years, you might have money in several super funds. One super account means less paper work and not having to manage multiple super accounts.

There are a few things to think about before you consolidate your super:

• Weigh up the benefits and features of your other super funds against your chosen super account
• Check the tax implications and see if your tax and preservation components will be impacted. Speak to your financial adviser for further information
• Compare the fees of your funds and check for exit or termination fees
• Don’t forget your insurance. Check if your chosen super account will give you appropriate cover to replace any cancellation of insurance cover that will occur by consolidating your accounts. Appropriate insurance can include level and types of cover as well as policy terms. If you have a pre-existing medical condition, consider whether you’ll be eligible for the same level of cover if you cancel your existing insurance policy
• If you intend to claim a tax deduction for personal contributions made into your other fund, there’s something you need to do first. Ensure your “Notice of intent to claim a deduction for personal contributions” is made and acknowledged by that fund.
• If you consolidate your super, you’ll have fewer funds to manage and it’ll be easier to keep track of your retirement savings.

2. Make before-tax contributions personal contributions

By making a personal super contribution and claiming the amount as a tax deduction, you may be able to pay less tax and invest more in super. The contribution will generally be taxed in the fund at the concessional rate of up to 15 per cent instead of your marginal tax rate which could be up to 47 per cent, including the Medicare Levy. Additional 15 per cent tax applies to concessional super contributions if your combined income and concessional contributions exceed $250,000.

This strategy could result in a tax saving and enable you to increase your super balance.

To claim the super contribution as a tax deduction, you need to submit a valid ‘Notice of Intent’ form. You’ll also need to receive an acknowledgement from the super fund. You’ll need this before you complete your tax return, start a pension or withdraw or rollover money from the fund you made your personal contribution to. It’s generally not tax-effective to claim a tax deduction for an amount that reduces your taxable income below the threshold at which the 19 per cent marginal tax rate is payable. This is because you would end up paying more tax on the super contribution than you would save from claiming the deduction.

3. Salary sacrificing

You might also be able to reduce your tax and boost your super balance through salary sacrifice. This is an agreement with your employer to contribute a certain amount of your pre-tax salary or potential bonus into your super. The word sacrifice doesn’t really make this strategy sound appealing, but it has some great benefits.

Instead of being taxed at your marginal tax rate, these contributions are generally taxed at the concessional rate of up to 15 per cent (an additional 15 per cent tax applies to concessional super contributions if your combined income and concessional contributions exceed $250,000). For example, if you earn $95,000 a year, you could save up to 24c in every dollar sacrificed.

If you’re a high income earner, you’ll be taxed an extra 15 per cent on your before-tax contributions (30 per cent in total). However, this is still lower than your marginal tax rate of 47 per cent (including the Medicare Levy).

Making before tax contributions to super can be a tax effective way of building wealth. Before tax (or concessional) contributions also include mandatory contributions made by your employer and are capped at $25,000 per year regardless of your age. Penalties apply for exceeding the cap.

4. Make after-tax super contributions

Maybe you’ve received an inheritance, a bonus, or sold an asset? If you are considering making non-concessional (after-tax) contributions to your super, there are important things to consider. The after-tax contributions cap is $100,000 pa, or up to $300,000, if you bring forward two years’ worth of contributions. To be eligible to make non-concessional contributions, certain requirements must be met.

Government super co-contributions also help eligible people boost their retirement savings. If you’re a low income earner and you make personal (after-tax) contributions to your super fund, the government also makes a contribution (called a co-contribution) up to a maximum amount of $500.

The amount of government co-contribution you receive depends on your income and how much you contribute. When you lodge a tax return, the ATO will work out if you’re eligible. If the super fund has your tax file number (TFN) they’ll pay it to your super account automatically. The way your co-contribution is calculated depends on the financial year in which you made your personal super contributions.

5. Top up your spouse’s super

Is your spouse working part-time, earning a low income or currently not working (but not retired)? If so, you may both be able to benefit by making a ‘spouse contribution’ to their super account. In the 2017/18 financial year, if your spouse’s assessable income is less than $40,000 and you make a spouse contribution on their behalf into their super account, you’ll receive a tax offset of up to $540 a year. Other eligibility criteria apply.

Note: Some of the strategies explained above are subject to your total super balance cap (combined value of your accumulation and pension accounts). For more information visit the ATO website or contact your financial adviser.