1. Make concessional (before tax) contributions to super

If you pay a fair amount of tax, then think about adding more of your pre-tax earnings to super. If you pay more than 15 cents in the dollar in tax, then making before-tax contributions may well save you precious dollars.

The good news is that once the money hits the super environment, any returns made on your super monies are taxed at a concessional tax rate.

One point to remember is that there is a cap on the amount of funds that can be shovelled into super. It’s called the contributions cap. If your employer is making super contributions for you then this reduces the amount that you can ultimately contribute yourself. Be careful that you don’t exceed this cap, because then you will be badly penalised by the tax department.

2. Combine your super accounts

Don’t allow fees to pile up on numerous super accounts. Australians hold on average three super accounts, which is probably two accounts too many.

Instead, combine your super accounts to one for you, and another for your spouse, if applicable. It could save you thousands of dollars in fees.

If you are at a loss as to how many super funds are potentially out there with your name on them, try these avenues:

– Firstly, check with the ATO’s SuperSeeker Service – which offers an online tool that helps you look for your lost and unclaimed super and provides a list of possible matches. SuperSeeker can also help you lodge a request with your fund online if you wish to transfer your lost super to another super account.

It is free to use. The online and phone services are available 24 hours a day, seven days a week. By phone call 13 28 65 Fast Key Code 1 then 2, and make sure you are have on hand your tax file number (TFN) and your date of birth.

–    AUSfund manages the lost super of millions of Australians for some of the largest super funds in Australia.

–    Ask your current super fund.

–    Ask your past employers for the super funds that have received contributions from you

Importantly, ensure that when you ultimately consolidate your super accounts, that you choose a low-cost fund.

3. Make non-concessional (after-tax) contributions

You can make after-tax contributions to your super fund every year – provided that you do not exceed $150,000 a year (for the 2010/2011 year, and for the 2011/2012 year).

If you’re aged 65 or over, you cannot exceed $150,000 in contributions in a single financial year. You must also satisfy a work test. If you exceed the $150,000 non-concessional cap, then the excess contributions will be whacked by a 46.5 per cent penalty tax.

Those under age 65, have more options. This group can bring forward two years’ worth of non-concessional (after-tax) contributions – which means that you can make as much as $450,000 (for the 2010/2011 year) in non-concessional contributions in a single financial year, or, say, $300,000 in the first year and the balance of $150,000 over the next two years.

4. Check eligibility for co-contribution

If you earn less than $61,920 a year, the Federal Government will add money to your super fund if you make an after-tax contribution to the fund.

If you earn $31,920 or less (for the 2010/2011 year), the Federal Government pays $1.00 for every dollar you add to your super fund in after-tax dollars, up to a maximum of $1,000 a year.

Let’s say you make a $1000 after-tax contribution, your super fund account receives a $1,000 tax-free contribution from the Government. If you make a $800 contribution, the Government forks out $800 into your super fund.

If you earn more than $31,920, your co-contribution entitlement reduces by 3.33 cents for every dollar you earn over $31,920, cutting out at $61,920 (for the 2010/2011 year).

5. Don’t forget to give your TFN to your super fund

Make sure that your super fund has your tax file number (TFN). If your super fund doesn’t have your TFN, any before-tax contributions you make will be hit with a penalty tax, and you won’t be allowed to make after-tax contributions. What’s more, you’ll be excluded from the co-contribution scheme.


This is for general information purposes only and does not constitute investment advice. Please see a financial adviser before making any investment decisions.