13 May 2015
The end of the financial year offers you the chance to sweep clean your financial plan and to review how well your Super is working for you.
What can you consider before 30 June 2015 to help your Super work harder for you? Here are five ways to maximise your Super.
1. Consolidate your Super
You may have more than one Super account, for example if you’ve had more than one job, and having multiple Super accounts can be an administrative nightmare. In addition, you are paying more than one set of fees!
Points to consider are:
- Will you pay an exit or withdrawal fee from the Super fund?
- If you hold insurance in the fund, can it be transferred in case you want to keep it?
Your Financial Adviser can help you to consolidate your Super, and ensure you are not losing anything that is important to you in one of your existing Super accounts. Or if you think you might have Super you’ve forgotten about, your Adviser can help you look for it too.
2. Top up your spouse’s Super
You may be able to claim an 18% tax offset on Super contributions of up to $3,000 you make on behalf of your non-working or low-income-earning spouse. This way, you can improve your partner’s Super balance, while strengthening your own position.
Please contact your Financial Adviser to discuss your options.
3. Consider a one-off deposit to your Super
You may contribute up to $180,000 a year (or $540,000 over three years) in after-tax contributions. Since this is from your after-tax income, the full contribution reaches your Super account and no tax is deducted when the contribution reaches your Super fund. Before making a contribution, please discuss your options with your Financial Adviser.
In addition, you can contribute up to $30,000 in before-tax contributions to your Super at the ‘concessional’ tax rate of 15% (or 30% tax if you earn more than $300,000 pa). If you’re aged 50 or over, this amount goes up to $35,000.
Topping up your Super is a smart way to build long-term wealth in a disciplined and steady manner. It can also help improve your tax position this year-end.
In case you’re self-employed, you can make an after-tax contribution and claim it as a tax deduction. You’ll need to fill in a ‘Notice of intent’ (NOI) form before you submit a tax return.
4. Salary sacrifice to top up your Super
As defined by the ATO, salary sacrifice is an arrangement where you agree to forego part of your future salary in return for your employer providing benefits. Salary sacrificing Super is an excellent way to boost your Super.
Put more of your pre-tax salary into your super and you’ll only be taxed at 15% (up to certain limits each financial year). Salary sacrificing makes sense if the tax rate you’d otherwise pay on that income is higher than 15%.
There is a limit on how much you can put into Super each year by salary sacrifice, and you should work through a budget to check how much you can afford to invest from each pay. Your Financial Adviser can help you to work out the best option for you.
5. Receive a free super top-op
Depending on how much you earn (i.e. maximum total income of $49,488), if you top up your Super using after-tax contributions (your take-home pay), you may receive up to $500 from the government.
This government co-contribution is intended to help eligible people grow their retirement savings. The amount you can receive depends on how much you contribute and what your income is.
Talk to your Financial Adviser to find out more about making a contribution before June 30 to receive a free super top up.
If you would like to meet with your PSK Adviser, call us on 02 9324 8888 or click here.