Smart Super Strategies for this EOFY
With June 30 fast approaching, it’s time to start thinking about your super for another year. We’ve put together five smart
strategies that may benefit you now, and help boost your super.
|Strategy||This may be right if you…||How to use this strategy||The benefits may include|
|1. Add to your super and receive a tax deduction||Are employed, self-employed or earn taxable income from other sources (such as investments)||Make an after-tax super contribution and claim a tax deduction||
|2. Get more from your salary or bonus||Are an employee||Arrange for your employer to contribute some of your pre-tax salary or a bonus into super, as part of a salary sacrifice agreement||
|3. Convert your savings into super savings||Have money outside your super that you’d like to invest for retirement||Make an after-tax super contribution||
|4. Get a super top-up from the Government||Earn1 less than $56,113 p.a. from your job or business||Make an after-tax super contribution||
|5. Boost your spouse’s super and reduce your tax||Have a spouse who earns1 less than $40,000 p.a.||Make an after-tax super contribution into your spouse’s super account||
To use any of these strategies you’ll need to meet certain conditions. A financial adviser can assess your eligibility and help you decide which strategies are appropriate for you.
The tax advantages of saving in super
Saving more in super can come with tax and other benefits this financial year – but that’s just the start. Once money is invested in super, earnings are taxed at a maximum rate of 15% – instead of your marginal tax rate, which may be up to 47%2. This low tax rate can help you build up savings for your retirement. When you do retire, you can also transfer your super into a ‘retirement phase’ pension3. Here, you won’t pay tax on investment earnings, and any income payments you receive from age 60 onwards are tax-free.
Tips and traps
Before you add to your super, keep in mind you won’t be able to access the money until you meet certain conditions. There are caps on how much you can contribute to super each year. It’s important to take the caps into account, as penalties may apply if you exceed them. Make sure any contributions you want to make this financial year are received by your fund before June 30. With electronic transfers (including BPAY), the contribution takes effect the day your super fund receives the money, not the day you make the transfer. Other eligibility criteria and conditions apply in relation to these strategies. Further information can be found on the Australian Taxation Office website ato.gov.au.
You’ll need to meet certain conditions before you can benefit from any of these strategies. A financial adviser can help assess your eligibility for using these strategies, explain the different options available to you in detail and help you decide which strategies are appropriate for you.
1 Includes assessable income, reportable fringe benefits and reportable employer super contributions. Other eligibility conditions apply.
2 Includes Medicare levy.
3 There is a limit on the total amount that can be transferred to retirement phase in a person’s lifetime. This limit is $1.7 million in FY 2021/22 (subject to indexation).
Important information and disclaimer
The information provided on this website is general in nature. We have not considered your financial circumstances, needs or objectives and you should seek the assistance of your Australian Unity Personal Financial Services (AUPFS) authorised representative before you make any decision regarding any strategy or financial products mentioned on this website. Whilst all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly neither AUPFS nor its related entities, employees or agents shall be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information.
The trustee for Plus 7 Financial Management trust trading as Plus 7 Financial Management ABN 11 211 901 965 is a corporate authorised representative (no. 1007915) of Australian Unity Personal Financial Services LTD (AUPFS) ABN 26 098 725 145, an Australian Financial Service Licence Holder (AFSL No. 234459).
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