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 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. Whether salary sacrifice is right for you will depend on your personal circumstances and level of income.
Claim a tax deduction on your super contributions
By making personal contributions to super, you may be able to claim a tax deduction to reduce your assessable income. The contribution claimed as a tax deduction is taxed at 15% instead of your marginal tax rate. To take advantage of this strategy, you must generally earn less than 10% of your assessable income (plus reportable fringe benefits and reportable employer super contributions) from an employer.
Protect your family
Under insurance is a major issue in Australia and this can be frightening for you or your family if you were to get very sick, pass away or become disabled. You may get adequate life insurance cover and pay less for premiums by purchasing insurance through your super. This involves holding life insurance in your super account and using your contributions or account balance to pay for the premiums, rather than paying for the premiums from your after-tax money.
Act now so you don’t miss out
There are many super strategies you can put into place to boost your retirement savings and achieve tax benefits 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.