How's your financial fitness? Part 3 - Making additional contributions

11 Mar 2021

Making extra super contributions isn’t something you have to do. But those extra contributions – however big or small – could make a significant impact to your super down the track.

What the future could look like

Your retirement could last 20 years or more. So the longer you contribute, and the higher the rate, the greater your retirement figure could be. Small sums now could turn into big sums later in life. Obviously there are things to consider – like the fact you generally can’t touch that money until you’ve hit retirement age. But this is a long-term strategy.

If you decide you want to contribute a little extra to your super, there’s two ways of doing it:

Salary sacrifice

This means you direct some of your take-home pay into your super before tax is taken out. From a tax point of view, it’s great. The extra money that goes to your super is only taxed at 15% which is much less than you would pay if you took that same amount as ordinary income. You will have less take-home pay each cycle but that’s something you need to weigh up. You can contribute up to $25,000 a year using this method.

After-tax contributions

If you have some spare cash after each pay cycle, you could decide to contribute to your super account. You can put up to $100,000 into your super from after-tax contributions.

Let’s look at Anna’s situation as an example:

  • Anna is 35 and has a starting super balance of $50,000.
  • Let’s say Anna’s average salary throughout her career is $90,000.
  • If Anna contributed $50 a week after tax into her super (with a return of 6%), by the time Anna is 60 she would have around $75,000 extra in her account.

Recovering from COVID-19 early release

The impact of the COVID-19 pandemic was significant and felt by all Australians.

To help cope with the financial impact of COVID, some of us took advantage of the Federal Government’s early super release initiative. 1.81 million Australians who met the financial hardship criteria accessed up to $20,000 of their super. All up, $15.5 billion was withdrawn.

If that was you, your focus should be on rebuilding your super so you can enjoy the retirement you want. Easier said than done? Not necessarily.


If you altered your lifestyle during the pandemic, such as tightening your budget in some areas, consider maintaining those measures even when your financial position improves.

Every little bit helps, and it can be as simple as cutting a few extra coffees a week.


Concessional (before-tax) contributions and non-concessional (after tax) contributions are a great way to build your super up again.

Spousal contributions (if you’re a MilitarySuper member) and government co-contributions if you’re a low-income earner can also help to increase your super.

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