Are you making the best use of your Superannuation?
Here are a few ways you could increase your retirement savings by making the best use of your Super:
- Salary Sacrifice – you could add extra funds to super via salary sacrifice, which would also reduce the amount of income tax payable.
- Tax-deductible Super Contributions – if you are self-employed, you can claim a tax-deduction for your super contributions.
- Government Co-Contribution – if you contribute after-tax dollars into super, the Government will match your contribution dollar for dollar up to $1,000, however this depends on how much you earn each year.
- Spouse Contribution – If you have a husband or wife who earns less than $10,800 per year, you can make a spouse contribution into their super fund of up to $3,000 and you could receive a tax offset of up to $540.
- Small Business Retirement Exemption – If you sell your business in order to retire, the ATO provides a Capital Gains Tax exemption for capital gains up to a lifetime limit of $500,000. If you are under 55 years of age just before you make the choice, the amount must be paid into a superannuation (or similar) fund. There are another three Capital Gains Tax concessions provided by the ATO that are available to small business owners preparing to sell their business.
- “Transition-to-Retirement” Strategy – if you are over age 55 and still working, you may be able to undertake a “transition-to-retirement” strategy to accelerate your superannuation savings without sacrificing your current lifestyle. The age at which you can start this strategy depends on your date of birth.
If you would like more information on retirement planning and making the best use of your superannuation, please download the free White Paper.
Keep in mind:
- These are specialist strategies and should not be acted upon without further advice from your accountant or financial adviser.
- Salary sacrifice and tax-deductible contributions are taxed at 15% at the time they are received by your super fund.
- There are limits on how much you can normally contribute to super that qualify for a tax deduction.
- You cannot access your super funds until you retire after your preservation age (usually between 55 and 60 years of age) except for the “transition-to-retirement” strategy mentioned above or in case of severe financial hardship (strict rules apply).
Retirement Planning Advice
If you’d like to discuss your ideal retirement lifestyle and the strategies to ensure you’ve adequately prepared, contact Prudentia Financial Planning. First time consultations are free of charge.