The Pros and Cons Increasing Super Contributions
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Pros and Cons of Increasing Your Super Contributions

At any point in your career, it’s essential to take a serious look into financial planning for retirement. Considering your super contributions is a significant aspect of retirement planning and how it matches your goals for those retirement years.

You essentially see three different types of contributions for your superannuation. These are your salary sacrifice arrangements, employer super guarantee contributions (aka SGC), and personal contributions (which are tax-deductible).

If you have the means to do so, you might also be thinking about increasing your contributions to boost your savings. With that in mind, there are some good and less-than-great factors to consider.

Why You May Want to Increase Your Super Contributions

Numerous benefits could entice you to increase your contributions. Here are some advantages that you can get from doing so:

  • Increasing your contributions can improve the tax benefits you receive. Personal concession and salary sacrifice contributions, in particular, can reduce your income tax for the year. It lowers the marginal tax rates eating into your funds.
  • You would be boosting your retirement fund. It gives you more savings to rely on when you finally hit retirement.
  • You remove the risk of spending your money too soon and ruining your goal amount for retirement. You’d be putting more savings into an untouchable fund.
  • Any insurance included in your super account will benefit. Any costs of this premium can be covered by your increased contributions so that your set-aside balance doesn’t need to get touched.

Possible Downsides to Increasing Your Super Contributions

Alternatively, increased contributions still pose risks. It is best to understand what these possible downsides are before deciding to increase your contributions.

  • If you exceed the limit on concessional contributions, you will be taxed more. It’s crucial to monitor how much you are putting into your fund every financial year.
  • One of the more significant risks is putting away money you may want to use in the present. It’s essential to consider your financial priorities when thinking about your super contributions. Once you put money into a super contribution, you can no longer access it for the time being. This can be potentially restrictive if you don’t have separate funding for potential investments or spending.
  • If you have investments tied into your super fund, all contributions will be put into it.
  • You could also be increasing your contributions in a way that turns out isn’t as sustainable for your lifestyle. You need to balance your plans with immediate needs to secure your assets.


These factors should help you make up your mind on whether or not to increase your super contributions. When trying to make the best retirement plans, it comes down to a balance of your resources, current needs, and retirement goals.

If you have decided to increase your super contributions from your employer, you need to inform your payroll department or employer and discuss the details.

If you are self-employed or trying to increase your contributions, you will have to contact your super fund provider and ask them about the necessary steps. In general, there is a concessional contribution cap of $27,500 per financial year for individuals of every age.

Are you looking for a trusted financial adviser in Port Macquarie? Coastal Advice Port Macquarie specialises in providing clients with the best retirement they can enjoy through personalised financial advice. Book a complimentary meeting with us now.


Disclaimer: The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice Group’s position and are not to be attributed to RI Advice Group. They cannot be reproduced in any form without the express written consent of the author. This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice. Newcastle Financial Planning Group, Central Coast Financial Planning Group, Sydney Wealth Advisers, Coastal Advice Port Macquarie and Coastal Advice Ballina Byron are subsidiaries of Coastal Advice Group which is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.
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