Clock is ticking so start some superannuation strategies now

← Homepage



SUPER fund members should ignore the distractions of an election campaign and another wave of planned rule changes, and start thinking about an end-of-financial year boost to their nest egg.

June is a key time for super strategies to maximise the benefits of superannuation and tax laws, which, while constantly changing, still remain the lowest-tax structure for saving money.

It starts with maximising your concessional, or tax-deductible, contributions, says William Buck director Todd Want.

Despite the Budget proposals to reduce the concessional contributions caps to $25,000 per annum, the current concessional contributions caps still apply for this year $30,000 for those under 50 and $35,000 for those 50 years and older, Want says.

Salary sacrifice can only be organised in advance, so now may be the time to set this up for next financial year, while small business owners and pre-retirees who dont earn most of their income as an employee can also make tax-deductible contributions to super.

Want says the recent Budget changes, which will lower the limits of how much people can pump into super from July 2017, mean that this year may present a better opportunity than future years to make extra contributions.

There is no guarantee that the planned changes will pass through parliament.

Dont leave extra super contributions to the last minute, Want says. The ATO generally takes the view that the super fund needs to receive the contribution by 30 June in order for it to be considered a contribution for this year. Making a contribution by electronic transfer on 30 June may result in it being received by the fund in early July.

Maximum Wealth Advisers partner Gianni La Scala says lower and middle income earners can consider making an after-tax, or non-concessional, super contribution in June to potentially qualify for the Federal Governments co-contribution. Its available for workers earning less than $50,454 and can inject up to $500 into your savings.

La Scala says tax-deductible super contributions such as salary sacrifice only attract tax at 15 per cent, rather than a persons marginal tax rate of up to 49 per cent.

If you have sold an investment and made a gain in the current financial year, you could potentially make a contribution to super to help reduce the capital gain, he says.