Hi everyone. I have a quick question for you. When it comes to super at what salary does it make sense to put extra into super up to the additional 30k per year ?
Anything you earn over 37K will attract income tax of 32.5% plus 2% medicare levy, so it does make sense to salary sacrifice into super and only pay 15% contribution tax. However, you need to take into account your personal circumstances. Personally I think it's not a bad thing to prioritise non-super investments if you're younger.
- First thing you need is a cash emergency fund, or at least access to cheap credit to achieve the same thing
- Do you need to save for a house deposit?
- Super won't help your financial situation until you're at least 60, have you considered investing in stocks/index funds? A reliable dividend stream will start helping your cashflow NOW and will possibly help you retire before 60, or assist you to live in the case of sickness or unemployment.
- You might not even live until 60
- The government might change the rules and not let you get your super until you're 70, 80 or even 100.
My plan is to leave super, while keeping an eye on it in growth funds until I'm in my 50s and have a reasonable expectation that my super will be available soon, hopefully by that point I have built up quite a lot of wealth and will be able to maximise all avenues of topping it up before it becomes available.