For many Australians, the decade leading up to retirement is the most important of all. With the finish line in sight, it is natural to start thinking about whether your superannuation balance is enough to support the lifestyle you want.
The good news is that the final 10 years can also be the most powerful. With focus and the right strategies, there's still plenty of time to add meaningful dollars to your nest egg. Here's how.
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Take advantage of concessional contributions
If you're still working, salary sacrificing into super can be one of the most effective ways to give your balance a boost.
Concessional contributions, which include employer super guarantee payments and any extra pre-tax contributions you make, are generally taxed at 15%, which may be lower than your marginal tax rate.
By maximising these contributions (up to the annual cap), you can grow your superannuation faster while reducing your tax bill at the same time. Win-win!
Use non-concessional contributions wisely
If you have spare savings outside your superannuation, you may want to consider non-concessional contributions as well. These are made with after-tax dollars, but the benefit is that once inside super, they can grow in a low-tax environment.
In some cases, you may even be able to use the bring forward rule to make up to three years' worth of non-concessional contributions in one go. This can be especially useful if you have sold an asset or come into extra cash that you want to be working for your retirement.
Review your investment options
At this stage of life, it is worth taking a close look at how your superannuation is invested. Too conservative, and your balance may not keep pace with inflation. Too aggressive, and you may face more volatility than you're comfortable with.
Many funds offer balanced options that adjust risk levels as you get closer to retirement. The key is to make sure your investment mix matches both your time horizon and your tolerance for risk.
Consider downsizer contributions
If you're 55 or older and selling your family home, you may be eligible to make a downsizer contribution of up to $300,000 into super from the sale proceeds. Couples can contribute up to $600,000 combined.
This can be a powerful way to turn home equity into retirement savings, all while potentially lowering the tax you'll pay on investment earnings.
Don't forget the basics
Finally, don't overlook the small things that add up over time. Check whether you have multiple super accounts and consider consolidating them to avoid unnecessary fees. Review your insurance premiums inside super to ensure that they are appropriate. And make sure your fund's performance is competitive — even small differences in returns can compound into big sums over a decade.
Foolish takeaway
The last 10 years before retirement are a critical window, but also a time of great opportunity. By maximising contributions, investing wisely, and using strategies like downsizer contributions, you can give your super balance a meaningful boost.
