Whether you're falling behind on your superannuation goal or just want to boost your balance, here are five easy ways to boost your balance by $10,000.
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1. Review your superannuation setup and performance
The easiest way to get back on track is by reviewing the setup and performance of your current superannuation fund.
Is your fund performing well and in line with market expectations or a benchmark such as the S&P/ASX 200 Index (ASX: XJO)?
The difference between a poor-performing fund and a top-performing one can be the difference between boosting your balance by another $10,000 and losing money down the drain.
You also need to check that your fund's risk appetite aligns with your own. Putting your money into the wrong type of fund can quickly chip away at your balance, but also, being too conservative too early means you'll lose out on the potential for more growth.
2. Sacrifice some of your salary
The easiest way to boost your super balance is to add as much to it as you can. Concessional contributions are pre-tax super payments taxed at a lower rate of 15%, and capped at a total of $30,000 per year. Concessional contributions include employer super guarantee, salary sacrifice, and any pre-tax personal contributions.
3. Make a lump sum payment after tax
You can also add after-tax income to your super. This is called a non-concessional contribution.
You can make these contributions up to age 67 without extra work testing or exemptions. This is capped at $120,000 per year.
4. Stay on top of your concessional contributions rules
What many Australians don't know is that if you don't use your capped total of $30,000 per year in concessional contributions, you can carry it over to the next financial year. In fact, you can carry over your leftover pre-tax cap amounts from the past five years, which means you can make larger contributions above the $30,000 limit without the extra tax.
There is also the "bring-forward rule". This is similar to the catch-up concessional contribution, but the bring-forward rule applies to their non-concessional contributions. Under this rule, eligible Australians can contribute three years' worth of non-concessional contributions (up to $120,000 per year) at once.
Low- and middle-income Australians might also be eligible for a government co-contribution if they make after-tax contributions to super.
5. Ask your spouse to add extra
Couples can boost their combined super savings if the higher-income earner contributes after-tax funds to the lower-income earner's account. If the lower-earning spouse brings in less than $40,000 per year, you might also get a tax offset.
Great, this is helpful but how long will it take to see the $10k on my balance?
How long it'll take to truly boost your superannuation balance by $10,000 depends entirely on how much extra you contribute using the steps above, and how frequently.
For example, adding $20 per week would total an additional contribution of $1,040 over the course of the year. Assuming your superfund has an average return of around 6%, you can expect it to take around seven or eight years to reach $10,000.
If you did the same thing but added the equivalent of $50 per week, or $2,600 per year, it would take more like 4 years.
Meanwhile, if you decide to add a lump sum of $5,000 right now and let compounding do the rest of the heavy lifting, you're looking at about four or five years.
