Contributing extra to your superannuation can be a beneficial strategy for both your current financial situation and your future retirement. Since you earn $60,000 per year, making additional contributions to your super can have several advantages.

1. Tax Benefits: Contributions made to your superannuation from your pre-tax income, known as concessional contributions, are taxed at a rate of 15%, which is likely lower than your marginal tax rate. At an income of $60,000, your marginal tax rate is 32.5% (excluding the Medicare levy). This difference can result in significant tax savings. For example, if you contribute an additional $10,000 to your super, you could save approximately $1,750 in taxes for that year.

2. Compound Interest: By increasing your super balance, you’re providing more capital to grow over time through compound interest. The effect of compounding becomes more powerful over a longer period. Since you’re 28, the contributions you make now have decades to grow before you retire, potentially increasing your retirement fund substantially.

3. Lower Lifetime Taxable Income: Regularly contributing extra to your super can reduce your taxable income each year, potentially placing you in a lower tax bracket, especially beneficial if you’re close to the threshold of a higher tax bracket.

However, there are also considerations and potential reasons why you might choose not to max out your super contributions:

• Liquidity: Money contributed to super is locked away until you reach your preservation age (currently between 55 and 60, depending on when you were born). If you anticipate needing funds for other significant expenses (e.g., buying a home, starting a business), you might prefer to keep some of your savings more accessible.

• Contribution Caps: As mentioned, there is a cap on how much you can contribute to your super at the

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