With the end of financial year just around the corner, there are many ways you can increase your retirement savings by implementing tax-effective super strategies.
How you can benefit
The end of financial year is a great time to think about how you can boost your super savings before 30 June, and get your financial affairs in order.
There are many strategies you can implement before the end of financial year to boost your retirement savings and achieve tax savings, such as taking advantage of the government co-contribution scheme, or benefiting from spouse contributions and salary sacrificing.
End of financial year planning opportunities are different for everyone, because they depend on your life stage and personal circumstances.
A financial adviser is the best person to work out which strategy best suits your personal circumstances. They will also make sure you and your family don’t miss out on any opportunities at the end of the financial year.
Pay less tax via salary sacrifice
Salary sacrifice means putting part of your pre-tax income into your super and potentially paying less tax because concessional contributions are taxed at 15% (up to the concessional contribution caps). This is compared to investing your after-tax money into super which may have been taxed the highest marginal tax rate of up to 46.5% (inc Medicare levy).
Whether salary sacrifice is right for you will depend on your personal circumstances and level of income.
Take advantage of Government concessions
Many people can take advantage of the Government concessions available to increase their super savings, such as the Federal Government co-contribution scheme.
If you are a low to middle income earner and eligible for the co-contribution scheme, the Government currently contributes up to $1 for each $1 of personal after-tax contributions you make to your super. This could mean up to an extra $1,000 in your super account – a significant amount.
Boost your spouse’s super savings
If you have a low income earning spouse, you can help to top up their retirement savings by contributing to their super and reduce your income tax at the same time. You may be entitled to a tax offset of up to $540 if you contribute to their super.
You could also split your employer super contributions or personal deductible contributions with your spouse. This strategy may reduce your tax liability, and if you contribute more into the older spouse’s super, it may mean accessing tax-free benefits sooner.
Act now so you don’t miss out
As you can see, there are many super strategies you can put into place to boost your retirement savings and achieve tax effective outcomes before 30 June and thereafter. “And even though there is a special focus on utilising these opportunities before 30 June, these strategies can actually be used all year round to grow your retirement savings.”
For more information on these super strategies and end of financial year planning, speak to your financial adviser or contact Eastwoods Wealth Management on 08 8132 9288
This material is current as at March 2012, but may be subject to change. It has been prepared without taking into account your objectives, personal financial situation or needs. This information does not constitute tax advice and before making any financial decision, Eastwoods Wealth Management Pty Ltd recommends you obtain professional financial and taxation advice specific to your circumstances.