Australian super - worth making a one-off contribution?

[mustachepungoeshere]

My husband and I are 29.

Is it worthwhile us each making a one-off contribution to our super (e.g. $5000, to make the most of the next couple of decades of compound interest) before continuing with other investments?

[nora]

Short answer, I would vote no. If you want a significant amount of super when the time comes, you will need to put a lot more in than that. 10000 now only gives you about 80000 in 25-30 years dependent of course on returns.

And if your goal is early retirement, see other AU discussions on this topic about whether super is a good idea at all, and if so, how much to put into it.

[Ozstache]

The earlier you are going to retire, the less a proportion of your stash you are going to want in super because you can't access it until <insert ever increasing preservation age estimate here>. As Nora says, there is already discussion on this matter on this forum that you should search for. Some of us model it a spreadsheet, noting that whatever assumptions are chosen can significantly alter the outcome.

[happy]

Not a straight forward answer.

Firstly it depends on  a number of things like: is this a pre or post tax contribution, what marginal tax rate  are you in, how much do you already have in there, are you already maxing pre tax conts, when are you planning on retiring and so forth. Also what is your personal view about super and the govt actions  into the future.

Personally I can see increasing govt debt and a massively ageing population, so I see a govt desperate to fund say the next 20-30 years of "old folks", who paid their taxes in anticipation of some support in their last years ( same as they did previously). By about 30-40 years the worst of it will be over hopefully????

If the current socialist mood prevails I think the govt will be happy to provide some incentive for funding of a mustachian type retirement in the realm of 20-40k p person. So do your math to end up with somewhere between 500k-1m  in super per person - I think going for more is risky…if adding 5000 now makes sense depending on your figures then do it.