EOFY savvy super strategies

By Damian Gibson

Financial Adviser, Elevate Wealth Solutions


THE end of the financial year is approaching quickly, which means it is time to get smart with your super.

Want to help boost your retirement savings while potentially saving on tax?

Here we will discuss some savvy super strategies for you to consider before the end of the financial year.


Tax-deductible super contributions

If you contribute some of your after-tax income or savings to super, you may be eligible to claim a tax deduction.

This means you will reduce your taxable income for this financial year, potentially pay less tax, and boost your super balance all at the same time.

This contribution is generally taxed at 15 per cent inside super.

Depending on your circumstances, this is possibly a lower rate compared to your marginal tax rate, which could be up to 47 per cent (including Medicare Levy).

Therefore, you could save up to 32 per cent in tax.

Once you’ve made the contribution to your super, you need to send a valid Notice of Intent form to your super fund and wait to receive an acknowledgement from them before you complete your tax return, start a pension, or withdraw or rollover the money.

Keep in mind that personal deductible contributions count towards the concessional contribution cap, which is $25,000 for the 2019/20 financial year.

However, you may be able to contribute more than that without penalty if you did not use the whole $25,000 cap in 2018/19 and are eligible to make ‘catch-up’ contributions.


Convert your savings into super savings

Another way to invest more into your super is by using some of your after-tax income or savings to make a personal non-concessional contribution.

Although these contributions do not reduce your taxable income for the year, you can still benefit from the low tax rate of up to 15 per cent that is paid within super on investment earnings.

This tax rate may be lower than what you would pay if you held the money in other investments outside super.

Before you consider this strategy, ensure the contribution does not push you over the non-concessional contribution cap, which is $100,000 in 2019/20, or up to $300,000 if you meet certain conditions and your super balance is under $1.6 million.


Top-up your super with help from the Government

If you earn less than $53,564 in the 2019/20 financial year, and at least 10 per cent of that income is from your job or a business, you may want to consider making an after-tax super contribution.

If you do, the Government may make a ‘co-contribution’ of up to $500 into your super account.

The maximum co-contribution is available if you contribute $1000 and earn $38,564 per annum or less.

You may receive a lower amount if you contribute less than $1000 and/or earn between $38,564 and $53,564 per annum.


Boost your spouse’s super and reduce your tax

If your spouse is not working or earns a low income, you may want to consider making an after-tax contribution into their super account.

This strategy could potentially benefit you both, as your spouse’s super account gets a boost and you may qualify for a tax offset of up to $540.

You may be able to get the full offset if you contribute $3000 and your spouse earns $37,000 or less per annum, including assessable income, reportable fringe benefits and reportable employer super contributions.

A lower tax offset may be available if you contribute less than $3000, or your spouse earns between $37,000 and $40,000 per annum.

There is no doubt about it, superannuation is one of the most effective ways to save for your retirement.

Employing some of these strategies before you retire can have a really positive impact on your super balance.

Before making any contributions to your super, it is important you understand all the associated rules, benefits, and consequences to ensure it is right for you.

A financial adviser will be able to guide you through these strategies in more detail and give you confidence in your decision making.

Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information.

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About the Author: Eastern Shore Sun

The Eastern Shore Sun is your monthly community newspaper, reaching over 30,000 homes and businesses in the communities of Clarence and Sorell. It is the product of Nicolas Turner, Justine Brazil, Ben Hope, Simon Andrews, Tobias Hinds and guest contributors, with support from advertisers.

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