Increase Retirement Savings With These Tips

June 1, 2022
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It's possible to enjoy the lifestyle one has envisioned and live comfortably in old age--by taking the steps to increase retirement savings.Despite concerns of many about not having enough money to tide them over for life, data show that retirees will be able to live comfortably--meaning they will have plenty of money--once they leave the workforce. These individuals may experience a comfortable retirement lifestyle thanks to a combination of mandated super contributions, non-super savings, and the Age Pension. They can expect at least 91 per cent of their pre-retirement income.

Today’s lifestyle will dictate tomorrow’s retirement

For individuals planning to retire early or are currently trying to catch up, one thing's for certain: the quality of retirement will depend on the quality of lifestyle.How much one spends today--and expect to spend in the future--will determine how much one has to save to prepare for the best life possible.Retiring with a healthy nest egg starts with enhancing your money habits today.

How to boost retirement savings

Claim a tax deduction

Super contributions taken from after-tax income are tax deductible. Individuals can claim for this which means it’s possible to reduce taxable income for the financial year and potentially pay less tax.

Sacrifice part of your salary

Salary sacrificing can be a tax-effective way to grow your super. Employees may arrange for their employer to allocate a portion of pre-tax income to a super fund. By 'sacrificing' part of the salary one potentially pays less tax than if they’d received it as a take-home pay.

Make personal contributions

What’s left from after-tax income can be poured into a retirement fund. This personal contribution allows individuals to benefit from the low tax rate which may be lower than what one would have to pay if you put the money in investments other than super.Before making personal contributions, remember that since it's considered non-concessional, it must not exceed the cap ($100,000 to $300,000 in 2018/19) because there may be penalties to pay.Get a Federal top-upFor low-income earners—those making less than $52,697 in the 2018/2019 financial year, the Government may provide co-contributions as much as $500. The maximum amount is only available if one contributes $1,000 and does not earn more than $37,697 per annum.

Reduce tax by contributing to spouse's super

A tax offset is available for individuals who make after-tax contributions to their spouse's fund. This applies to those whose spouse is unemployed or earns less than $37,000 or less per annum.Making the right financial decisions will be vital in having peace of mind during retirement. But while many are hoping to retire early and enjoy the fruits of their labour, not a lot of people are taking the right steps. But for those that do, millennials for example, these 4 things have been effective in helping boost their retirement funds:

  • Having a savings account
  • Little to no credit card debt
  • Using windfall to pay off debt or save
  • Putting more income toward retirement

Are you on track to retire when you want to?

Working alongside a professional financial planner will help you make the most out of your super contributions.

Find out more ways to boost your retirement nest egg by talking to us. Schedule a consult with our Strategic Wealth Planners here.

Book an appointment! blog has been prepared by RJS Wealth Management Pty. Ltd. ABN 24 156 207 126. RJS Wealth Management Pty. Ltd. is a Corporate Authorised Representative (No. 438158) of Modoras Pty. Ltd. ABN 86 068 034 908 an Australian Financial Services and Credit Licensee (Number 233209). The information and opinions contained in this blog is general information only and is not intended to represent specific personal advice (Accounting, taxation, financial, insurance or credit). No individual's personal circumstances have been taken into consideration for the preparation of this material. Any individual making a decision to buy, sell or hold any particular financial product should make their own assessment taking into account their own particular circumstances. The information and opinions herein do not constitute any recommendation to purchase, sell or hold any particular financial product. Modoras Pty Ltd recommends that no financial product or financial service be acquired or disposed of or financial strategy adopted without you first obtaining professional personal financial advice suitable and appropriate to your own personal needs, objectives, goals and circumstances. Information, forecasts and opinions contained in this blog can change without notice. Modoras Pty. Ltd. does not guarantee the accuracy of the information at any particular time. Although care has been exercised in compiling the information contained within, Modoras Pty. Ltd. does not warrant that the articles within are free from errors, inaccuracies or omissions. To the extent permissible by law, neither Modoras Pty. Ltd. nor its employees, representatives or agents (including associated and affiliated companies) accept liability for loss or damages incurred as a result of a person acting in reliance of this publication.

June 1, 2022

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