Super Tips and Strategies for Your 30s and 40s
Superannuation isn’t a “set-and-forget” investment. During
your 30s and 40s, major life decisions such as starting a family or buying a
home can arise, making it crucial to regularly review your superannuation
strategy to ensure it aligns with your personal circumstances. While not every
tip may apply to everyone in this age group, these strategies will help you
consider important super-related decisions during this stage of life.
1. Reduce Your Tax Bill
As your salary grows, your 30s and 40s are ideal for
considering a salary sacrifice arrangement with your employer. By contributing
extra from your pre-tax salary to your super, you not only boost your
retirement savings but also reduce your annual tax bill since concessional
(before-tax) contributions are taxed at the lower rate of 15%.
2. Tailor Your Insurance for Better Value
Default insurance in your super may not meet your needs and
can be more expensive due to a lack of underwriting. By customizing your policy
through an adviser, you can:
·
Avoid Out-of-Pocket Costs: Pay 100% of
your premiums from your super, keeping your personal budget intact.
·
Get Tailored Coverage: Customize your
policy to suit your unique needs, ensuring sufficient cover for death, TPD, or
income protection.
·
Save Money: Underwritten policies can
often provide better coverage at a lower premium, saving you money compared to
default super insurance.
·
Improve Claimability: Personalized
policies reduce the risk of denied claims due to insufficient coverage or lack
of underwriting.
This approach ensures better coverage, cost savings, and
peace of mind without extra strain on your budget. If you need help with your insurance in super please
feel free to get in touch with our team for free consultation.
3. Update Your Benefit Nomination
Most super funds allow you to make a death benefit
nomination to guide the trustee on how to distribute your super if you pass
away. Ensure your nomination is binding and up-to-date, as it usually needs to
be refreshed every three years. If it lapses, the trustee will decide who
receives your benefit.
4. Boost Your Partner’s Super
During your 30s and 40s, your spouse might take time off
work to care for family members. You can take advantage of tax benefits by
contributing to their super or splitting your contributions with them.
5. Review Your Investment Options
As your personal circumstances and assets outside of super
change, regularly reviewing how your super is invested is important. Even
though you may still have many years before retirement, it’s wise to ensure
your entire portfolio (including non-super investments) aligns with your risk
tolerance and financial goals.
6. Set a Super Savings Goal
Think about how much you want in your super by the time you retire. Setting a clear savings goal increases your chances of achieving it. Once set, you can decide if additional voluntary contributions or changes to your investment strategy are necessary to meet your target.
7. Explore Personal Tax-Deductible and Carry-Forward
Contributions
Making voluntary contributions to your super may entitle you
to a tax deduction, which can reduce your income tax and enhance your
retirement savings. Additionally, you or your partner could benefit from
carry-forward contributions, allowing unused concessional contribution caps to
be applied in future years.
8. Take Advantage of Government Contributions
If your income qualifies, you may be eligible for a government co-contribution of up to $500 into your super when you make personal contributions. Additionally, if you earn less than $37,000, you may receive up to $500 under the Low Income Superannuation Tax Offset (LISTO).
9. Consider a Self-Managed Super Fund (SMSF)
If you’re looking for more control over your retirement
savings, establishing an SMSF might be worth considering. SMSFs offer tailored
investment strategies and could be beneficial if you plan to purchase business
premises. However, be aware that they come with strict regulations and
oversight from the ATO.
10. Check Your Employer’s Super Guarantee (SG)
Contributions
Ensure your employer is making SG contributions at least
quarterly. You can monitor your super payments through your fund or via the
ATO’s online services (myGov). Regular checks are especially important given
the financial pressures some businesses face post-COVID, which could impact
their ability to make super contributions.
Bonus Tip: Accessing Super Early
Though you’re in your 30s or 40s, severe financial hardship
or compassionate grounds might allow early access to your super. However,
strict eligibility conditions apply.
These strategies provide a foundation for securing your
financial future while navigating the unique challenges of your 30s and 40s.
Want to know more?
If you’d like to discuss any of the content in this article
and how it may apply to you, please call me on 1800 668 153.
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Author Profile: Jeffrey Liu, JP, is the founder and
principal adviser of Hippo Insurance (aka: Hippo Wealth), with a deep expertise
in wealth protection. His extensive experience includes roles in the wealth
management divisions of Westpac, ANZ, and a local multi-family office. As the
host of “Riches Talk,” a podcast dedicated to cultivating personal and business
growth, Jeffrey has established himself as a thought leader in developing life
riches. His insights have been featured on SBS, The Australian, and Channel 7.
Notably, he was a semi-finalist on Australia’s Got Talent in 2010. Learn more
at http://www.hippoinsurance.com.au