Superannuation

How to save more for your retirement

Contribution strategies to increase your retirement nest egg include:

Salary sacrificing

This is a strategy where you contribute part of your pre-tax income to super. Salary sacrifice contributions usually attract a tax of just 15 per cent, about half the average marginal tax rate.

If you're under 50 and eligible you can contribute up to $50,000 a year this way. For those over 50, the annual limit until July 2012 is $100,000.

Ask your employer if you can make salary sacrifice contributions to your super fund. You may be able to contribute one-off payments like your annual bonus if you make prior arrangements.

Continuing to make salary sacrifice contributions while using a transition to retirement income stream can be a tax-effective way to top up your retirement benefit while drawing a tax-free income stream.

Self-employed contributions

Super contributions can be a great way for self-employed people to boost their retirement nest egg and reduce their company tax liability.

If you're self-employed you can claim a full tax deduction on super contributions you make up to $50,000 a year. If you're over 50 this limit increases to $100,000 until July 2012.

Co-contributions

This is a Government funded program to help lower income earners save for their retirement. If you earn less than $60,342 a year and make personal contributions to super, the Government will match your contributions up to a certain limit. If you earn under $30,342 the Government will contribute $1.50 for every dollar you contribute up to $1,500 in any one year.

The Australian Tax Office will automatically deposit your co-contribution to your super account if you qualify.

Spouse contributions

Contributing to super on behalf of your spouse is a tax-efficient way for a couple to save for retirement. If you are employed and your "eligible spouse" is either not working or earns less than $13,800 a year, you can contribute to their super and gain certain tax benefits.

Personal post-tax contributions

These are made from your after-tax salary so you don't pay any contributions tax on them. Best of all your investment earnings are taxed at the concessional super rate of 15% and you can access your super benefit tax-free when you retire. You can contribute up to $150,000 in any single year, or $450,000 over a three-year period using this strategy, if you are under age 65.