Taking a break doesn’t just have implications for your income today. It can also really affect your super.

Overseas travel, starting a family, going into a new business venture: life is full of unexpected opportunities that can bring your finances into the spotlight.

When you’re planning a major life change that involves taking extended time off work, your super is probably one of the last things on your mind.

But if you’re trading in your day job to see the world or raise a family, it’s not just today’s salary you’re missing out on.

You’re also missing super contributions over a period of time when your money has the best chance of growth through investment earnings and compounding interest.

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Loose change adds up

Compounding interest means that when you start saving can be much more important than the amount you put away. It can be the difference of several hundred dollars every year.

It also means effective forward planning for a career break now can have a much bigger impact on your retirement than putting more into super later down the line.

While retirement may seem like a world away, the earlier you start to think about it, the more control you’ll have over the kind of life you can have in your years after work.

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Take control today

To keep your super ticking along, consider putting a lump sum into super through salary sacrifice before you go on leave.

You could also make a one-off personal contribution with your savings or disposable income if you can spare the cash.

If your partner is still working, they could contribute to your super balance – you might even be eligible for a tax rebate for contributions up to $3,000 a year.

Even if it’s a small amount, remember that some is always better than none. 

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Now is a great time to…

  1. Make a financial plan

    Planning ahead with a realistic financial budget can make a world of difference, particularly if you are unsure of when you’re going to get back to work.

    Set your budget
  2. Work out how much time you can afford to take off

    MoneySmart’s career break calculator allows you to calculate exactly how your time away from work is projected to impact your super balance later down the line.

    Calculate the impact
  3. Reassess your insurance needs

    Weigh up the benefits of financial security and the cost of your premium, and decide what’s best for you in your circumstances.

    Read more about insurance
  4. Update your beneficiaries

    If you’re taking time off work to start a family, make a nomination and ensure your super ends up in the right hands. 

    Choose your beneficiaries

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