Get to know your super

Hi, I'm Ofalyn Ayuk, Member Solutions Consultant at Russell Investments.

The compulsory super system means 11% of your wages or salary must go into a super fund.

Called the Superannuation Guarantee, this rate will increase to 11.5% from the first of July this year.

That's a large part of your pay, so it's worth understanding where it goes and how to make the most of it.

As one of our members, you have a lot of control over your super savings – perhaps more than you think.

Start by logging in to your online account. It's the quickest way to check your super balance, how contributions are coming in and how your super is invested. After all, your super is a long-term investment that is meant to provide you with a significant source of income when you retire, so it’s important to check it from time to time.

Apart from employer contributions, you can choose to make additional before-tax or after-tax contributions to help give your super that extra boost.

After all, superannuation is one of the most tax-effective ways to save for retirement. Here’s a quick overview of how that works:

With before-tax contributions, money is contributed to your super account before income tax is deducted. Once the money is in your account, it’s normally taxed at 15% instead of the marginal tax rate that applies to your taxable income, which can be between 21% and 47% if you include the Medicare Levy.

That difference in tax means you get to keep more of your money when you direct it to super than if you keep it as take-home pay.

Employer contributions, salary sacrifice contributions and personal deductible contributions all fall under this category.

After-tax contributions, are made from your after-tax income, meaning the money has already been subjected to income tax. This means, after-tax contributions are not taxed when they enter your super account.

These contributions can include personal contributions and contributions from sources other than your employer.

Adding even a small amount extra into super early on can help increase your balance over time thanks to the power of compound interest.

Want an easy way to work out how much to contribute? Check out our award-winning GoalTracker® program.

It can calculate the amount of income you're heading for in retirement, help you set an income goal that's right for the retirement lifestyle you want, and offer tailored advice and strategies to help achieve it. One of these strategies focuses on additional contributions.

GoalTracker comes at no additional cost to you – all you have to do is log in to your online account and access the program.

You can find more information on all these topics including GoalTracker on the Zest! web pages and on our website.

Thanks for watching.