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The super way to turn $19.25 a week into $1,500 this year, and $185k by retirement

The $500 government bonus will help supercharge your super for retirement.

You probably have grand money plans for the coming year - as in, plans to cut back and spend less. But there is a guaranteed way to save money and even make bonus money, starting with just $19.25 a week.

The cost-of-living crisis is now entering a third calendar year and we are all economising hard. Next year, you could earn a bonus $500 from a government boost.

Here's how it works.

Compilation image of Nicole Pedersen-McKinnon and Snapshot of the moneysmart money super saving compound interest calculator
To earn your free money this year, you'll need to double your weekly super input for the remaining 6 months of the financial year. (Source: Supplied/ (Samantha Menzies)

First, you contribute $19.25 into your superannuation fund each week and the government tops this up by up to $500. You don’t have to do it weekly as long as you reach the $1,000 per year necessary to qualify.

Next, with every passing calendar year, compounding then turns that free money into far more. For example, if you are aged 30, $1,500 will become $15,094 by the time you retire at 60 (assuming you make an 8 per cent annual investment return).


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Imagine if you did that every single year. Your $1,500 per year – of which you have only contributed $19.25 a week or $45,000 all up – will turn into a life-changing nest egg of $185,019.

Snapshot of the moneysmart money saving compound interest calculator
Moneysmart's money-saving compound interest calculator shows how quickly your deposit will grow in value. (Source:

How to claim your free $500

This opportunity is called the superannuation co-contribution and has been designed to encourage people to pay extra money into super in order to be able to fund their retirement.

So, your $19.25 a week is after-tax money. As in, it costs you $19.25 instead of less. It is also possible to arrange a before-tax or salary sacrifice contribution with your employer, whereby you only pay the 15 per cent superannuation contribution tax. But it's that $19.25 after tax for a year that nets you the $500 contribution. You don't need to apply – your super fund will tell the government if you are eligible.

So, what’s the criteria? You need to be in some kind of paid employment and can get a part-$500 payment on income all the way up to $58,445. The full $500 payment is available below income of $43,445. Oh, and you need a super balance below $1.9 million.

(Note: because the co-contribution is calculated on the financial year – and we are now half-way through this – you will need to double your weekly contribution for the next six months to get over the $1,000 line. But, from July 1 and the beginning of a fresh financial year, just $19.25 a week will do it from there on in.)

How else to boost your super this year

The new year is also a great time to do an investment audit. This is not nearly as complicated as it sounds – all you need to do is check where your money is going and that it’ll get you where you want to go.

In general terms, the younger you are, the more risk you can afford to take with your money because you have more time to make up for any falls in your fund value. And, as you approach retirement, you may want to begin keeping some money in safer assets, such as fixed interest and cash.

Then, you want to check the pedigree of your super fund. Has it returned equal to or above the median manager for the year? And are the fees below 1.1 per cent average? Remember, fees erode the money that would otherwise be available for the fun stuff in retirement.

Get your fund right and mop up the free annual $500 into for super every year that you can. It's a particularly excellent strategy for carers of progeny or parents who are phasing back into the workforce, to be compensated for their periods of lower super contributions.

Nicole Pedersen-McKinnon is the author of How to Get Mortgage-Free Like Me, available at Follow Nicole on Facebook, Twitter and Instagram.

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