Ask Paul: Why can't I put all my wages into super?

By

Dear Paul,

Is it possible to save all of my wages into my super and request my super provider pay me a lower amount each month from the age of 60 to my retirement age at 67?

The purpose is to provide better super when I do retire by investing more into my account. - Connie

Ask Paul Clitheroe Why can't I put all my wages into super

That is a ripper idea, Connie, but in regard to employer contributions, the maximum any of us can put into super from our salary is $30,000 (2024-25).

Super is pretty complicated, so you would need to check your personal situation with your super fund or adviser, but depending on how much you have in your account, you could add your own money, after tax is taken out, up to $120,000 a year

Again, it is a bit complex, so you should check your personal situation.

But, in general, anyone younger than 65 will need to take out 4% a year of their super.

This increases steadily until age 80, when this becomes 7%.

Get stories like this in our newsletters.

Related Stories

TAGS

Paul Clitheroe AM is founder and editorial adviser of Money magazine. He is one of Australia's leading financial voices, responsible for bringing financial insight to Australians through personal finance books, the Money TV show, and this publication, which he established in 1999. Paul is the chair of the Australian Government Financial Literacy Board and is chairman of InvestSMART Financial Services. He is the chair of Financial Literacy at Macquarie University where he is also a Professor with the School of Business and Economics. Ask Paul your money question. Unfortunately Paul cannot respond to questions posted in the comments section. View our disclaimer.
Comments
Chris Eagle
July 31, 2024 5.54pm

That advice is not correct. It depends on which super scheme your employee entitles you to use. For example there are many constitutionally protected super funds such as Super SA and many others that allow 100% of salary to be contributed to super if you are aged 18 through to 60 with NO concessional cap of 30,000 per annum . Ie you can salary sacrifice 100% of your salary or 80% and still receiving the full tax free threshold.

Gareth S
August 25, 2024 7.14pm

You can possibly contribute tax effectively more to your super than the maximum yearly amount, if you did not contribute the maximum every year for the last 5.

You need professional advice, but basically there is an allowance to "catch up" on any margin between paid and what could have been paid, accumulated for last five years.

It is entirely conceivable that for one year, someone on 100k a year could pay their entire wage into super for no extra super tax penalties, though I am not saying it is necessarily wise to do so. In rough terms, you paid 10k a year in, you could have been paying 30k, diff of 20k times 5 years is 100k.

Get advice, I'm only giving you the rough out.