You'd be surprised what an extra $2,000 super contribution could be worth in retirement
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The new financial year has just arrived, making it the perfect time to consider giving your superannuation a significant boost. Making a concessional contribution is a smart way to save for retirement, reduce the tax paid on that income, and potentially place you into a lower tax bracket.
A concessional contribution is money that goes into your super fund and is generally taxed at a concessional (or discounted) rate of 15% as it enters the fund. You can make these contributions in a couple of ways:
- Through your employer. By setting up a salary sacrifice arrangement, a portion of your pre-tax salary goes directly into your super.
- From your own pocket. You can make a personal contribution from your after-tax income and then claim a tax deduction for that full amount in your annual tax return.
Keep in mind that there is a concessional contribution cap of $30,000 for the 2025-26 financial year, which includes your employer's super guarantee contributions.
The power of growth in your super
Let's look at how a single concessional contribution you make this new financial year could grow over time – and why a one off boost to your super over the next financial year could make a huge difference down the track.
It's important to remember that these are illustrative examples based on a reasonable 6.3% average annual growth rate.
This factors in typical fees and the additional taxes applied to your super's investment earnings. While past performance is not an indicator of future performance, it does provide a sense of how compound growth can work in your favour over time.
Example 1: Contributing $2,000
Aussies who put just $2,000 in their super over the course of this financial year (which equates to $1,700 after the 15% contributions tax is deducted), could see that additional amount grow to $2,307 over five years. While that might not seem like a huge leap initially, that $1,700 could, over 30 years, become a remarkable $10,628 – an increase of 525% from the amount that initially entered your super.
Example 2: Contributing $10,000
Scale that contribution up to $10,000 and, after the 15% contributions tax, the $8,500 that goes into your super could grow to $11,537 over five years. But the real benefit comes when you look at the power of growth over 30 years, as that $8,500 deposit could result in a whopping $53,139 in your super – an increase of 525% from the original amount that went in.
Here are some other scenarios:
How different contributions could boost your super
| Years to Retirement | Extra balance at retirement ($2k contribution) | Extra balance at retirement ($5k contribution) | Extra balance at retirement ($10k contribution) |
|---|---|---|---|
| 5 |
$2,307 |
$5,768 |
$11,537 |
| 10 |
$3,132 |
$7,829 |
$15,659 |
| 20 |
$5,769 |
$14,423 |
$28,846 |
| 30 |
$10,628 |
$26,570 |
$53,139 |
Note: These figures represent the total additional amount you could have in your super based on a future annualised investment return, net of fees and taxes, of 6.3%, which is consistent with recorded by APRA for MySuper products. It includes your initial post-tax concessional contribution and its accumulated investment growth.
Bottom line
If you can swing it financially, don't miss the opportunity to potentially boost your retirement savings and take advantage of the tax benefits available this new financial year. And if you're unsure about how personal concessional contributions might fit into your personal financial plan, it's always a good idea to chat with a financial advisor.
You can also check out the winners of our 2025 Mozo Experts Choice Awards for our best superannuation picks, or compare some attractive options below:
Superhero disclaimers:
#Low Fees - Findings based on Superhero’s analysis of SuperRatings’ Fee Report - October 2024, accessed 5 December 2024. Fees for Superhero Super’s Growth and High Growth investment options are in the top quartile based on Total Fees and compared against the SR50 Balanced (60-76) and SR50 High Growth (91-100) Indices respectively. Performance - Findings based on Superhero’s analysis of SuperRatings’ Fund Crediting Rate Survey – October 2024, accessed 5 December 2024. Based on Superhero Super’s Growth and High Growth options being in the top quartile for one year return across the SR50 Balanced (60-76) and SR50 High Growth (91-100) Indices respectively. Refer to the Superhero Super PDS and TMD for found at superhero.com.au/support/documents for more information.
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Aware super disclaimers:
^SuperRatings Fund Crediting Rate Survey, March 2025. Based on SR50 Growth (77-90) Index. Returns are after tax and investment management expenses but before the deduction of administration fees. Past performance is not an indicator of future performance.
^^Chant West Super Fund Fee Survey December 2024, High Growth [81-95% in growth assets] investment option index and $50,000 account balance. Fees and costs can vary from year to year. Past fees and costs are not a reliable indicator of future fees and costs. Fees and comparisons may differ for other investment options and account balances. Aware Super’s High Growth option as published in the Aware Super Future Saver PDS.