: Personal Contribution to Superannuation Plan I am from Australia and have a question regarding retirement planning. I am trying to make a decision if I should start making after tax contributions to my Super to match my employer

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For the difference of 00/year, I would probably find a better use for the money. Where I live, I could buy an annuity that would make up the difference for a little over 0K.

With your added numbers, a 0 monthly deposit in your savings account would net you a lump sum of 0K if you assume a 6% rate of return. Even with a 0% rate of return, you're making 0K of deposits over the next 32 years.

A house would reduce your expenses instead of increasing your income, so it would probably be a tax efficient way to boost your standard of living in retirement more with that money than you would through the Super or through other savings.

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Just to clear a few things up first, if you are going to be a self funded retiree you can retire from age 60 and have up to .6M in a super pension fund earning you tax free income. If you want to get an Age Pension from the government then you will have to wait until age 67 (however this may rise further by the time you reach that age due to people living longer).

The second thing to clear up is that for any personal super contributions you make up to the concessional cap of K you can claim a tax deduction for. The 25K includes the total of your employer SG contributions and your personal contribution. If you make non-concessional contributions (after tax contributions) you have a yearly cap of 0K.

With your employer's SG contribution being 9.5% x K = 00 and you looking to contribute 0 x 12 = 00, you would be well below the K yearly cap.

So if you claim a deduction for this 00 you will reduce your annual tax by 35. You will however, have to pay 15% contribution tax inside your super fund for this 00, being 70. So your annual net tax savings will be 65.

But as you start earning more and your income rises above K, your net tax savings will increase to 16 for the same 00 contribution.

If you increase this contribution as your pay increases, then your tax savings will be even higher.

So the benefits of super:

tax advantage when going in - contributions and earnings only taxed
at a maximum of 15%.
claiming a deduction for any personal contributions to super is one of the best ways to reduce how much personal tax you pay each year.
zero tax in retirement - up to .6M in a super pension fund, any earnings are tax free and any income you take out is tax free.

Conclusion, you are 35 and you might want to save to buy a house now, but you should also try to make some contributions to super if you can. You can claim a deduction for it and reduce your taxes. As you get a little bit older (say in the next 10 years) and your income grows, it will become even more important and beneficial to make concessional contributions to your super so you can grow your pot, pay less tax (now and in retirement) and have a more comfortable retirement. Remember, in 30 years time it is likely that further changes are made to the Age Pension, the age might rise further, the requirements to get it might become harder, so you shouldn't be planning on getting any Age Pension, but if you do, see it as just a little bonus on top.