Three steps to super success in 2024-25

It’s easy to forget about your super when you have a lot going on in your life. That’s why the first month or two of the new financial year should be ‘super season’ – the perfect time to check in on your super and decide if you need to make any changes. 

Here are our three steps to get you feeling confident your super will work hard for you in the year ahead. 

The first step is to go over the basics. You’ll find all your super details by logging into your account via FirstNet or the CFS app. Start by checking the following details: 

• Are my account details up-to-date? 
• How much super do I get each pay? 
• Has all my super arrived in my super account? 
• What’s my super balance? 

Then it’s time to dig a little deeper. Ask yourself the following questions: 

• Who gets my super if I pass away? 
  Your super balance doesn’t automatically form part of your estate, so the only way to ensure your super is paid directly to who you want it to go to is by making a valid nomination to an eligible beneficiary(s). Make sure you have nominated a beneficiary and use this form to add or update your beneficiaries. 
  
  
• Is my insurance cover appropriate? 
  Insurance in your super may include things like death, disablement and income protection cover. The benefits of having insurance in your super may include peace of mind, lower premiums, and automatic deductions from your super that don’t affect your after-tax pay.
  
  If you’re not sure how much you need, the MoneySmart life insurance calculator can be helpful for working out your insurance needs. Learn more about reviewing your insurance here.

It’s important to have a goal for the amount of super you want to have by the time you stop working. When you have a goal, you can work out if you’re on track to reach it. Ask yourself: 

• How much super will I need?
  The Association of Superannuation Funds of Australia (ASFA) provides some benchmarks that may help you work out how much super you’ll need and if you’re on track. Our retirement calculator can also help you estimate your retirement balance and needs.
  
  
• Is my super invested appropriately? 
  Do your investment options suit your age, investment goals and appetite for risk? Take a look at our risk profiler to check your super is invested appropriately to match your risk appetite and the returns you expect. 

It’s also pretty common for the government to make changes to our super system. While you don’t have to be across all the ins and outs, it’s good to know what changes have been made this financial year so you can understand how they may affect you. 

These changes can also create opportunities and strategies that will help you get more from your super. Take into account: 

• Super Guarantee increases to 11.5%
  One of the biggest changes this financial year was the Super Guarantee rate increase from 11.0% to 11.5%. This is the minimum compulsory percentage of your eligible earnings  employers must contribute into your super account. You may have already noticed an increase in the amount your employer has been contributing to your super this financial year. For example, someone earning $120,000 p.a. before tax will have an extra $600 going into their super. The rate will increase by another 0.5% on 1 July 2025. 
  
  
• Contribution caps increase
  The standard contribution limits increased this financial year as well. You can now contribute up to $30,000 in concessional (before-tax) contributions, or if your total superannuation balance on 30th June in the previous financial year is less than $1.9M, you can contribute up to $120,000 in non-concessional (after-tax) contributions to top up your super balance. The limits were previously $27,500 and $110,000. 

The last step is to consider whether you can afford to put a bit more money into your super. It doesn’t have to be much. The beauty of super is that a small amount, contributed regularly, can make a big difference to your retirement savings over time. You may wish to think about contributing: 

• Stage 3 tax cuts
  Unless you’ve been living under a rock, you’ll know all about the government’s Stage 3 tax cuts that came into effect for all taxpayers on 1 July 2024:
  - 19% tax rate reduced to 16%
  - 32.5% tax rate reduced to 30%
  - 37% tax rate threshold increased from $120,000 to $135,000
  - 45% tax rate threshold increased from $180,000 to $190,000
  Depending on your taxable income, these changes mean you will save hundreds or even thousands of dollars in tax each year. 
  Before you get used to having that extra money in your pay, think about whether you can use some of it to set up a regular contribution to give your super balance a boost.
    
• Salary sacrifice 
  A salary sacrifice arrangement is an easy, tax-effective way to boost your super. The money comes out of your pre-tax salary or wages and is then taxed at a maximum of 15% if your income (for Division 293 tax purposes)is less than $250,000. 
  So while you’re boosting your super, you’ll also be lowering your taxable income so may pay less tax overall. Just make sure that your total concessional contributions (which include salary sacrifice) don’t exceed $30,000 for the year if you cannot use the  provision.
  
  
• One-off contributions
  If you’re in the position to make a one-off large contribution, the bring-forward rule is another tax-effective way to direct additional money into your super. 
  This rule allows you to make up to three years of non-concessional contributions in a single financial year – as long as you haven’t used this rule in the previous two financial years and you are under age 75 on 1 July in the financial year of the intended contribution. Now that the non-concessional contribution limit has increased, so have the bring-forward amounts. The maximum amount you can contribute depends on your super balance at the end of last financial year: 

If you’d like some help setting up your super for success this financial year, book a call with one of our super consultants.