Should i top up super?

[maza]

Hi everyone.

Since im building my home, i have taken 1 year leave without pay to concentrate on my house.I had a government job and they were giving me rougly 5-6k in super a year.

Now i want to keep the super rolling, do you think i should put a lump sum of 5k straight in, or should i make similar forthnightly payments similar to what my job was giving me?

 

[Peter_Tersteeg]

Given that you're not currently working, making contributions to your super won't bring you any tax benefits. If you're approaching retirement age (say 50+), then it might be worth while to contribute to super, but if you're more than 10 years away from retirement without a taxable income, then there are other investment vehicles that will be more flexible with even better long term tax benefits. The key thing being that you don't currently have an income.

If you've got a mortgage over your house, you might be better off to pay down that mortgage as quickly as possible.

If you're willing to look at other investments and have a long term outlook available, then perhaps direct property might be more suitable, but you can't borrow money without an ongoing income, so the first option might be better for you.

Realistically the quesiton you've ask is far to open ended with very little personal details for you to get any useful advice here. If you don't know what or how to invest, you might want to consider a financial planner, but look to one who is advice and strategy based, not product based.

People here will likely tell you to buy investment property, but without an income you can't leverage into property, which may not make it viable for you.

Whatever you do, don't put yourself in a position that you can't afford to live until going back to work.

 

[Rob G.]

If no significant income, perhaps eligible for the super co-contribution.

Possibly of some limited value.

Cheers,

Rob

 

[BV]

Hi everyone.

Since im building my home, i have taken 1 year leave without pay to concentrate on my house.I had a government job and they were giving me rougly 5-6k in super a year.

Now i want to keep the super rolling, do you think i should put a lump sum of 5k straight in, or should i make similar forthnightly payments similar to what my job was giving me?

Under these circumstances I wouldn't do it

 

[Sunfish]

I don't want to hijack Maza's thread but this Q can go in parallel I think:

We are retired but Mrs Fish still does a few hours for a couple of hundred a week. Is there any advantage in a lump sum dump into super for her for a couple of years?

We have some cash parked in a bank account and the markets don't look attractive ATM.

 

[Peter_Tersteeg]

Sunfish the big advantage of super as an investment vehicle is that contributions are taxed at 15% and when they go into pension mode the payouts aren't taxed at all. It's essentially the most tax effective investment vehicle available.

I'll also assume you're not currently drawing on your super.

If Mrs Fish is on a higher tax rate than 15% then there would be some benefit to making contributions. When you shift into pension mode there'd also be some tax benefits.

The question you need to ask yourself is can you outperform the tax benefits and potentially super fund manager by doing something else with the money in the meantime? What's the opportunity cost of putting the money into super?