There are a lot of benefits to making super contributions. So it’s definitely something that you should at least consider doing.
For example, you can qualify for tax savings by making salary sacrifice contributions to super. You may be able to get a tax offset by contributing money to your spouse’s superannuation account. You may be able to qualify for a government co contribution, with the government, chipping in some money towards your superannuation to help out.
It also comes with some tax benefits on the investment side as well. When you invest in your own name outside superannuation, you have to pay tax at the same rate as your work income, whereas when you invest inside superannuation, you only pay tax at 15%. Which could save you tax as well.
So again, it could provide some potential benefits down the track to start making super contributions.
In order to contribute to superannuation though, you have to give up something now, in order to gain the benefit in the future, likely at your retirement and most likely a better retirement as a result.
So you need to consider:
- Are you prepared to give up something now?
- Can you afford to give up something now?
- Do you need to give up something now? or
- Do you already have enough money in superannuation to fund the retirement that you want?
For some people, it may be a better idea to put that money towards a holiday now, whilst you’re fit and healthy. Potentially by the time you get to retirement, you may not be able to take that holiday, so all that savings that you put towards it and the waiting to take that dream holiday, may be a loss, and something that you regret later in life.
You need to try to find that balance between having what you want now, making the most of your health and fitness, and your ability to enjoy yourself, whilst also keeping an eye on the future and making sure that you’re going to have the retirement you always wanted.