John’s goals
- Grow his super balance significantly before retirement.
- Reduce his taxable income through deductible contributions.
- Maintain flexibility while working as a contractor.
Financial Impact
| Current situation | With $250 per week contributions | |
|---|---|---|
| Estimated super balance at age 67 | $488,000 | $638,000 |
| Taxable income | $127,000 | $114,000 |
| Tax paid | $31,400 | $27,300 |
Key benefits
How tax deductions work
- John claims his $13,000 annual contributions as a tax deduction, reducing his taxable income from $127,000 to $114,000.
- This lowers his tax bill by roughly $4,100 per year.
- Super contributions are taxed at 15%, which is considerably lower than his personal tax rate.
By making regular after-tax contributions and claiming a tax deduction, John can transform his retirement outlook, growing his super from $240,000 to around $638,000.
- Assumes the individual draws down their entire balance between age 67 and 95.
- Retirement balances are rounded to the nearest $1000.Numbers are presented in today's dollars, deflated using Average Weekly Ordinary Time Earnings (AWOTE) at 3.7% p.a.
- Based on SG of 12%.
- Based on current legislated tax rates as at 1 July 2025 and incorporating future legislated tax changes up to financial year 2027/28.
- Fixed fee is assumed to be $52 p.a., increasing in line with assumed wage inflation of 3.7% p.a.
- Asset based administration fee is assumed to be 0.15% in accumulation.
- Investment returns are based on the Aware Super MySuper Life Cycle option, assumed to be CPI + 4% until age 55, reducing from CPI + 4% to CPI + 2.75% between the ages 55-65 (inclusive) and CPI + 2.75% from age 65 onwards.
- Investment returns are assumed to be net of tax.
- CPI is assumed to be 2.5% p.a.
- No insurance premium is considered.
- Projection does not allow for any Low-Income Super Tax Offset (LISTO) or Government Co-Contribution amounts.
- This example is for illustrative purposes only and is not intended to provide a guarantee on outcome. It is a broad illustration of the steps a member could take, but the actions appropriate for an individual will vary depending on their personal circumstances. The case study is based on current regulatory requirements and laws, including tax rates, which may be subject to change. Investment return assumptions are for illustrative purposes only and for simplicity assume an average rate of return each year throughout the investment period. Actual returns year on year may vary materially and can be negative as well. If investment returns/inflation are higher/lower, final balances will differ. Consider if this is right for you and read our Product Disclosure Statement (PDS) and Target Market Determination (TMD) before making a decision about Aware.
Your quick guide to lodging a notice of intent
This video shows you how to claim your tax deduction after making an after-tax contribution to super.
Where to next?
* Before contributing, consider the relevant superannuation thresholds including the current annual limit for all before-tax contributions and after-tax contributions. Exceeding any of these thresholds, may reduce any tax benefits you could receive. Visit aware.com.au/grow.
[AD1] Advice provided by Aware Financial Services Australia Limited (ABN 86 003 742 756, AFSL 238430), wholly owned by Aware Super.
[AD2] Members can get advice about their Aware Super accounts at no extra cost, or advice on their broader needs for a fee.
Past performance is not an indicator of future performance.