Smart Super Strategies for this EOFY
With the end of financial year fast approaching its time to review your financial plans and strategies in place! This is particularly important for this financial year due to several changes that have applied for the first time in 2017-18, and some others that are starting on 1 July 2018. We have come up with five helpful strategies that may benefit you now and help boost your super.
- Add to your super and receive a tax deduction
Making an after-tax super contribution will enable you to claim a tax deduction for personal super contributions made to your super until you turn 75. The benefit of claiming a tax deduction on after-tax super contributions will help you pay less tax on your income and increase your retirement savings. You may consider this strategy if you are employed, self-employed or earn taxable income from other sources (such as investments).
- Get more from your salary or bonus
Arranging your employer to contribute some of your pre-tax salary or a bonus into your super is known as salary sacrifice. These salary sacrifice contributions will be taxed by the super fund at 15%, the same as your employer’s contribution. If you are an employee this will allow you to pay less tax on your salary or bonus and increase your retirement savings.
- Convert your savings into super savings
If you have money outside your super that you would like to invest for retirement, making an after-tax contribution will permit you to pay less tax on your investment earnings and increase your retirement savings.
- Get a super top-up from the government
Super co-contributions help eligible people boost their retirement savings. If you earn less than $51,813 p.a. from your job or business (Includes assessable income, reportable fringe benefits and reportable employer super contributions) and make personal after-tax contributions to your super fund, the government also makes a co-contribution up to a maximum amount of $500. The amount of government co-contribution you receive will depend on your income and how much you contribute.
- Boost your spouse’s super and reduce your tax
In 2017-18, a tax offset of up to $540 is available for spouse contributions of $3,000 where the receiving spouse’s total income does not exceed $37,000 p.a. The tax offset is then progressively reduced until the tax offset reaches zero for spouses who earn $40,000 or more.