NOTE: we do our best to share general resources so you can do your own research but keep in mind this information doesn’t consider your personal circumstances, objectives of needs. When it comes to investing in your super, you should consider if it’s appropriate, read PDS and TMDs and reach out to a financial advisor and tax accountant. When investing, there may be tax implications and you should get advice from a licensed tax adviser and financial advisor .

I take it you’ve landed on this article because you’re considering making after-tax super contributions to boost your retirement savings. Before I get into it, good on you for taking extra steps now to secure your financial future!

Within the Pearler community, many of us desire the FIRE life – to reach financial independence and retire early. So, it makes sense that you’re already thinking about and planning for retirement. And super plays a leading role in preparing for retirement. But we know that the government-mandated Superannuation Guarantee (SG) paid by your employer isn’t enough.

A great way to bolster your super is to make additional contributions. You can do this from your pre-tax income (salary sacrifice) and/or your after-tax income (personal contributions). We’ll get into the first another time, but let’s focus on after-tax super contributions for now.

What are after-tax super contributions?

After-tax super contributions are the amounts you contribute to your super account from your take home pay. While your employer pays SG contributions from your pre-tax income, any personal contributions you make from your after-tax income are treated differently.

How? Well, your pre-tax contributions (SG, salary sacrifice) are taxed at a concessional rate of 15% within your super account. In contrast, because you’ve already paid tax on after-tax super contributions, you may claim a tax deduction for these amounts. You can find out more on the Australian Taxation Office website.

How much do I need to contribute?

Now that you know what after-tax super contributions are, the next step is to calculate how much to contribute. This varies for each person. Consider how much super you already have, your SG contributions, age, target retirement age, lifestyle preferences and personal circumstances. For more info, check out our article on how much super you should have to retire comfortably.

To calculate the specific amounts you’ll need to contribute, working back from your goal is a good start. Using Pearler's Financial Independence Calculator, you can figure out the gap between where you are now and where you want to be. The calculator allows you to input variables such as your savings, super balance, pre-tax income and assets to help you plan.

Are there limits on after-tax super contributions?

Yes, there are. In case you didn’t already know, after-tax super contributions are also known as non-concessional contributions.

You’re currently allowed to make up to $120,000 in non-concessional contributions in a financial year. This amount changes every few years based on indexation, so check any updates on the ATO website each financial year.

Other things to consider

In addition to making after-tax super contributions, there are other ways you can grow your super. These include spouse contributions, government co-contributions and downsizing your home for extra funds to contribute. MoneySmart provides a useful summary on this to help you consider your options.

Hopefully this article has given you some clarity to proactively boost your super savings!