Jump Ahead
Lets be frank - everyone has a different attitude to their superannuation
We understand not everyone is savings for a house, paying a mortgage or thinking about doing that sometime soon.
So, for some people, saving in their superannuation may be a key part of their preparing for retirement strategy so keeping track of the changing super contribution laws is important.
Tax advantages of Saving In Your Super
Saving more in super can come with tax and other benefits this financial year – but that’s just the start.
What's the Big Deal about Super?
It can be very useful, depending upon your plans now and for later - and your time line towards retirement.
- Once money is invested in super, any earnings are taxed at a maximum rate of 15% – instead of your personal 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’ pension 3. Once a fund is in retirement phase, won’t pay tax on investment earnings, (and that's very cool) and any income payments you receive from age 60 onwards are tax-free.
Five Smart Strategies for your Super
Here are five strategies that could benefit you now, and help boost your super balance for later.
Super tips and traps
Make sure any contributions you want to make this financial year are received by your fund before June 30.
It very important to know that 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.
Pro Tip: Before you add to your super, keep in mind you won’t be able to simply access the money until you meet certain conditions.
Pro Tip: 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 website
Get smart and get super advice
You’ll need to meet certain conditions before you can benefit from any of these strategies.
Lets have a chat to 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.
Footnotes:
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 $1.6 million in FY 2020/21 (subject to indexation) and increasing to $1.7 million in FY 2021/22.
