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As the end of the financial year approaches, it’s the perfect time to consider giving your super a boost.
New analysis from Vanguard shows that small, consistent contributions can make a big difference to your retirement savings and even reduce your tax bill.
According to Vanguard’s research, a 30-year-old who contributes just $1,000 extra annually to their super for 15 years could be nearly $80,000 better off by the time they retire at age 67.1 That works out to just under $20 per week.
Even a single $1,000 contribution at age 30 could grow to more than $8,400 by retirement, thanks to the power of compound interest.
“The key to boosting your retirement savings is the power of compound interest. So, the earlier you start, the better,” says Renae Smith, Chief of Personal Investor at Vanguard Australia.
The following table highlights the potential growth in your retirement balance from making yearly additional contributions of $500 or $1,000 over 10 or 15 years, starting at age 30.
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Additional Payment
(annually)
|
Boost to super by age 67
|
|
Regular contributions for 10 years from age 30
|
$500
|
$30,473
|
| |
$1,000
|
$60,947
|
|
Regular contributions for 15 years from age 30
|
$500
|
$39,928
|
| |
$1,000
|
$79,856
|
How topping up your super balance before 30 June could reduce your tax bill
You may be able to claim a tax deduction for a voluntary contribution, which can help reduce your overall tax bill, as these contributions are generally taxed at a lower rate than most Australians’ marginal income tax rates.
For example, a 30-year-old earning $80,000 who makes a $1,000 voluntary super contribution and claims a tax deduction would receive a tax refund of $320 when they lodge their tax return. That means their net reduction in take-home pay is effectively $680.
After accounting for the 15% contributions tax, $850 would be added to their super. So, they’ve effectively reduced their net take-home pay by $680 to boost their super by $850 — leaving them $170 better off overall, as the table below shows.
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Voluntary contribution to super
|
$1,000
|
|
Tax deduction claimed
|
$320 (assuming a 32% marginal tax rate, including Medicare levy, based on an income of $80,000)
|
|
Reduction in take-home pay
|
$1,000 - $320 = $680
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|
Amount added to super (after 15% contributions tax)
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$1,000 - $150 = $850
|
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Net benefit
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Take-home pay is reduced by $680 to boost super by $850. The net benefit is $170.
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Don’t leave it to the last minute
To take advantage of these benefits this financial year, it’s important to act early.
It’s a good idea to aim to make any additional contributions at least a week before 30 June to allow for processing. For Vanguard Super members, the deadline to notify us of a voluntary concessional contribution is 23 June.
It’s also important to remember to submit a ‘Notice of intent’ form to your super fund before lodging your tax return if you plan to claim a deduction.
Also, keep in mind the contributions cap. This financial year, Australians can contribute up to $30,000 to their super at the favourable tax rate of 15%. These are known as concessional contributions, and the cap includes any mandatory contributions from employers. If you exceed that, it could lead to paying extra tax.
If you’d like to make regular additional contributions to your super, consider setting up a salary sacrifice arrangement with your employer. This way, a set portion of your before-tax salary is automatically paid into your super account each time you’re paid, helping you grow your retirement savings consistently and tax-effectively.
The end of financial year is also a great time to review your super fund’s performance and fees. At Vanguard, we’re committed to offering Australians a low-cost, easy-to-understand superannuation option that’s built for long-term growth.
Learn more about how to make the most of your super before 30 June by visiting the Vanguard Super website.
Important information:
The above examples are illustrative only and are based on the factors stated. It should not be taken to contain or provide an estimate or forecast. This information is not a substitute for tax advice. It has been prepared based on a set of assumptions which may not be applicable to you. If you are in any doubt about your personal tax position, we recommend that you seek tax advice from a registered tax agent.
1. Assumes 15% contributions tax on voluntary super contributions and gross investment returns of 6.4% based on the 10-year average annualised rate of return published in the APRA Annual Superannuation Bulletin (January 2025). Past performance should not be relied upon, and is not, an indication of future performance.
11 June 2025
By Vanguard
vanguard.com.au
12th-July-2025 | 