SUPERANNUATION
How do you decide between extra super contributions vs investing in ETFs?
I'm just starting to learn more about finance and recently had a conversation with a friend about making extra super contributions. I'm a high-income earner and subject to the 30% super tax, so I was wondering why I’d add more to super instead of investing in ETFs or other assets. My friend pointed out that super is only taxed once — which was a light bulb moment for me! How do you decide between contributing extra to super versus investing outside of it? What factors do you consider, and what are the pros and cons? I'm 43, so I won’t be able to access my super for about 20 years.
Lucas Garcia.
15 January 2025
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Comments (1)
Hi Lucas,
Great question. We actually just published a podcast about this recently.
There are pros and cons to both approaches, and it’ll depend on your priorities, goals, and age, which we explore in the podcast here: https://open.spotify.com/episode/2JABymucMWpO...
Your friend is actually incorrect, unless you have some type of super fund that I’m not aware of. Super is taxed on the way in, and the returns are also taxed. So it’s not fair to say it’s only taxed once. It does get taxed, just at a lower rate than people normally pay outside super.
All the best,
Dave
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