There are a range of opportunities available for everyone who has a superannuation account, whether it’s employer-sponsored, personal or DIY.

Table 1 - Available super opportunities

¹ The Government is gradually increasing the age from which years you can access your super from 55 year to 60 years. If your date of birth is before 30 June1960, you can access your super from 55 years. If date of birth is after 30 June 1964, you can access your super from 60 years.

² Must be gainfully employed for at least 40 hours in 30 consecutive days in the financial year the contribution is made.

³ From July 1, if you are aged 70 years to 74 years, you can use tax-deductible contribution strategies.

⁴ The transitional concessional cap of $100,000 will revert to a $50,000 concessional cap at the end of 2011/2012 financial year, subject to any indexation of the $50,000 cap which will be linked to CPI and will occur in $5,000 increments.

⁵ If you are aged under 65 years, you can contribute up to a maximum of $150,000 per annum or a maximum of $450,000 every three years, both as either single or contributions within stated caps. However, if you are aged 65 years to 74 years, you can contribute up to a maximum of $150,000 per annum, as either single or multiple contributions.

Under 50 years - start saving for your retirement now

People traditionally delay focusing on super until later in life, in favour of more pressing needs such as a mortgage, school fees and holidays. If you are in this age group, you may need to rethink your approach to retirement planning and focus on super now.

Not contributing anything above the Superannuation Guarantee (SG) while in this age group will significantly limit your tax-free retirement savings. While the annual caps now in place restrict your concessional contributions (such as salary sacrifice), the cap of $50,000 for this age group is still a good increase above the previous rules.

Those in this age group who turn 50 prior to 30 June 2012 will also be able to benefit from the transitional concessional contribution cap of $100,000 per annum.

These caps make it so important for you to start saving for your retirement as early as possible. Once you reach these caps or cannot use 100% of them, the only way to increase your retirement savings will be via your long-term investment strategy.

The best way to take advantage of these annual caps is to adopt a more active approach to your retirement planning by having a well-planned contribution and investment strategy in place, tailored to your circumstances. This could involve you:

1. Investing surplus cash into super. Looking at how much of your surplus cash (such as surplus income, bonus payments, an inheritance or other lump sums) could be invested into your super can help give it a significant boost. It may also be beneficial, depending on your financial circumstances, to consider selling an investment property or share portfolio and invest the proceeds into super as well.

2. Building super into your budget. Having regular super contributions (such as salary sacrificing a regular amount of your income and bonus payments) as part of your budget provides the foundation for a long-term retirement plan.

3. Doubling concessional contribution caps with spouse contributions. Assuming your spouse is employed, effectively using your spouse’s concessional contribution caps allows you to maximise your combined contributions into super. Learn more about co-contributions, contribution splitting and spouse contributions.

4. Reviewing your investment strategy. Ensuring your super is invested in the most appropriate mix of assets gives you the best chance of accumulating enough super to meet your retirement goals. Gearing within super using an internally geared fund is one strategy you can use to potentially accelerate your performance. Geared investments may not be appropriate for all investors as they are generally considered to have a higher level of risk than a comparable investment option that is not geared. While gains may be increased, it is important to understand that losses may likewise be increased.

As we mentioned, those in this age group who turn 50 prior to 30 June 2012 will be entitled to use the transitional concessional contribution cap but only for a short time. If you are in this age group, seeking financial advice will allow you to take full advantage of the benefits offered by these transitional caps in the limited time they are available to you.

50 – 54 years – re-prioritise your financial plans

Now that your children have most probably left home, you may be more focused on overseas holidays or home renovations. Consider adding a review of your financial plans to your list of things to do.

While you would have been able to contribute significantly more into super under the old system, if you use these new caps effectively you can still achieve a similar result. You should consider:

Contributing more now. Given you are only able to contribute on average, $150,000 per annum of after-tax monies, you should make any contribution you can now, as this gives your money more time to work for you within the tax-effective super environment. It may also be beneficial, depending upon your financial circumstances, to consider selling an investment property or share portfolio and invest the proceeds into super as well.

Timing your contributions effectively. Seeking expert advice on the best contribution strategy for your after-tax contributions (such as a maximum of $150,000 per annum versus a maximum of $450,000 every three years) will ensure you use the new caps to their full advantage.

Using the transitional concessional contribution cap. You will have up to a maximum of five years to capitalise on this $100,000 per annum cap from 1 July 2007 to 30 June 2012. This cap decreases to $50,000 per annum from 1 July 2012 (subject to indexation), so to take full advantage of this transitional cap you should consider increasing your salary sacrifice contributions (including bonuses) each year during this period.

Doubling concessional contribution caps with spouse contributions. Assuming your spouse is employed, effectively using your spouse’s concessional contribution caps allows you to maximise your combined contributions into super.  Learn more about co-contributions, contribution splitting and spouse contributions.

Reviewing your investment strategy. Ensuring your super is invested in the most appropriate mix of assets gives you the best chance of accumulating enough super to meet your retirement goals. Gearing, or borrowing to invest, is one strategy you can use to potentially accelerate your performance.

55 – 64 years – focus on your retirement goals

If you haven’t already made the decision to retire, it may now be getting closer. You may be:

1. still working but have delayed retirement planning

2. still working, but have focused on retirement planning since your 50s or

3. already retired.

There are a number of opportunities within super that make it possible for you to significantly increase your retirement savings. But you’ll need to act now.

To capitalise on the new rules, you may need to re-organise your finances and consider:

Timing your contributions effectively. Seeking expert advice on the best contribution strategy for your after-tax contributions (such as a maximum of $150,000 per annum versus a maximum of $450,000 every three years) will ensure you use the new caps to their full advantage.

Using the transitional concessional contribution cap. You will have up to a maximum of five years to capitalise on this $100,000 per annum cap from 1 July 2007 to 30 June 2012. This cap decreases to $50,000 per annum from 1 July 2012 (subject to indexation), so to take full advantage of this transitional cap you should consider increasing your salary sacrifice contributions each year during this period.

Doubling concessional contribution caps with spouse contributions. Assuming your spouse is employed, effectively using your spouse’s concessional contribution caps allows you to maximise your combined contributions into super.  Learn more about co-contributions, contribution splitting and spouse contributions.

Restructuring current investment mix. This involves looking at your whole financial situation and perhaps using your super as the focal point of your financial planning.

Reviewing your investment strategy. Ensuring your super is invested in the most appropriate mix of assets allows you to gives you the best chance of accumulating enough super to meet your retirement goals.

If you are still working and have been focusing on your retirement plans since your 50s, you should also consider the adequacy of your assets and how these fit into your overall retirement strategy.

As an example, if you are 55 or over, you could consider a Transition to Retirement (TTR) strategy. This is a strategy that could boost your retirement savings by allowing you to access your super as a non-commutable (ie non-cashable) pension while salary sacrificing into super, whether or not you have ceased working.

This strategy can be particularly effective if you are over 60, as pension payments are received tax free. For those under 60, while still a good strategy, tax may be payable.

TTR strategies can often be quite complicated, so why not phone Perpetual Private Clients on 1800 631 381 and we can show you how a TTR strategy can be tailored to work for you.

If you are already retired you should also specifically look at your:

Contribution levels, making sure your current contributions will still help you meet your retirement goals. You may find after re-evaluating your current contribution strategy that it may also be beneficial, depending upon your financial circumstances, to consider selling an investment property or share portfolio and invest the proceeds into super as well. You may also be able to make deductible contributions, as a way of boosting your super and manage capital gains tax.

Surplus income, determining how much of your surplus cash could be invested into your super.

Investment strategy, ensuring it is appropriately invested to ensure it will last throughout your retirement.

Pension, making sure the type of pension and amount you are receiving is still appropriate for your needs.

Total super balance, as you are now able to access your super benefits at any time, tax free.  

65 – 74 years – last chance to top up your super

If you are in this age group, you’ve probably tended to focus more on investments and property, rather than super. There are, however, some strategies you could now consider that may help to quickly top up your super:

Effective contribution strategy. Only being able to contribute a maximum of $150,000 per annum after tax means your approach to contributing to super (given the work test rules) will need to be highly structured during this period of your life. It may also be beneficial, depending upon your financial circumstances, to consider selling an investment property or share portfolio and invest the proceeds into super as well.

Eligible individuals can benefit from another five years. Previously only eligible individuals (such as the self-employed) could make concessional contributions to super up to 70 years of age. These individuals now have an extra five years until age 74 to make tax-deductible contributions to super, provided they meet the work test rules in the financial year the contribution is made. (Note: You should consult your financial and/or tax adviser about your eligibility to claim a tax deduction).

Doubling contribution caps with spouse contributions. Assuming your spouse is employed, effectively using your spouse’s contribution caps allows you to maximise your contributions into super.  Learn more about co-contributions, contribution splitting and spouse contributions.

Reviewing your investment strategy. Ensuring your super is invested in the most appropriate mix of assets gives you the best chance of accumulating enough super to meet your retirement goals.

Access your super benefits. You are now able to access your super benefits at any time, tax-free.

75 years and over - focus on income generation

Once you reach age 75, you are no longer eligible to make contributions to super.

However, now is the time to focus on income generation and your investment strategy, as it is very important you have the right estate planning strategies in place to ensure you have sufficient income in retirement.

Flexibility is the key here and you should regularly review your income requirements, as in some cases it may be more tax-effective for you to reduce your pension amount and retain it within super.