Sub category: Superannuation
 

EOFY: The perfect time to get your super sorted

So, it’s almost tax time. Yes, that wonderful part of the year when our minds turn to all things financial. Let’s look at this as an opportunity…

Why? Because, giving a damn about the state of your super now can pay off big time later. So let’s go through what you can do to make your future way more rewarding.

Remember: your super is not some random thing in the far-distant future. It’s money. Your money. And we have several ways, which you may not know about, to give it a very welcome boost.

1. Play matchy-matchy with the Government.

If you’ll earn less than $51,021 in the 2016/17 financial year, check out the Australian Government’s super co-contribution. Just make an after-tax contribution to your super, and if you’re eligible the Government will put in 50 cents for every dollar you contribute, up to $500 this financial year

2. Pump up the lump sum.

So you earn more than the above-mentioned threshold? Adding voluntarily to your super now can still make sense. That’s because the investment earnings on your super are taxed at a maximum rate of 15% (which can be lower than the tax you’ll pay on other investments). Don’t forget to keep an eye on how much you’re allowed to contribute. You don’t want to get hit with excess contributions tax!

3. Indulge in some super-related pillow talk.

OK, here’s a good one. Did you know if your wife or husband earns less than $13,800 a year, and you contribute to their super account, if eligible you could receive a tax offset of up to $540? Again, knowing these little ins-and-outs can really add up.

4. Self-employed? You can save even more.

If less than 10% of your taxable income is earned from an employer, you may be able to claim a tax deduction for after-tax contributions you make to super. So you can get a tax deduction on the money you add to super up to your ‘concessional contributions cap’. Which means if you’re eligible to claim, contributions tax of 15% will be deducted from the amount claimed.

5. Not such a big sacrifice.

‘Salary sacrificing’ to super means you make extra contributions to your super from your before-tax income. Money you add to your super through salary sacrifice is taxed at a concessional rate of 15%, so you could add more to your retirement savings while potentially paying less tax. If you can squirrel away that little extra into your super fund, you’ll certainly benefit in the long run. Don’t forget to keep an eye on your contributions caps to avoid any unnecessary excess contributions tax. Remember that your employer superannuation guarantee amounts and salary sacrifice amounts amount both count towards the concessional cap.

6. Beware of going over the limit!

Don’t forget, there are limits on how much you can contribute to your super. If you go over your limit you could be stung with extra tax. So, before you make any additional contributions make sure you find out more about the concessional and non-concessional contribution caps that apply to you.

See? Remaining positive and proactive in the lead up to tax time – and actually giving a damn – can get you closer to your financial goals.

ING DIRECT Living Super provides an award-winning flexible online solution which helps you manage your super throughout all stages of your life. Find out more.

 

The information is current as at publication. Any advice on this website does not take into account your objectives, financial situation or needs and you should consider whether it is appropriate for you. Deposit products, savings products, credit card and home loan products are issued by ING, a business name of ING Bank (Australia) Limited ABN 24 000 893 292, AFSL and Australian Credit Licence 229823. ING Living Super (which is part of the ING Superannuation Fund ABN 13 355 603 448) is issued by Diversa Trustees Limited ABN 49 006 421 638, AFSL 235153 RSE L0000635. The insurance cover offered by ING Living Super is provided by Metlife Insurance Limited ABN 75 004 274 882, AFSL 238096. ING Home and Contents Insurance is issued by Auto & General Insurance Company Limited (AGIC) ABN 42 111 586 353 AFSL Licence No 285571 as insurer. It is distributed by Auto & General Services Pty Ltd (AGS) ABN 61 003 617 909 AFSL 241411 and by ING as an Authorised Representative AR 1247634 of AGS. All applications for credit are subject to ING's credit approval criteria, and fees and charges apply. You should consider the relevant Product Disclosure Statement, Terms and Conditions, Fees and Limits Schedule, Financial Services Guide, Key Facts Sheet and Credit Guide available at ing.com.au when deciding whether to acquire, or to continue to hold, a product. Before interacting with us via our social media platforms, please take a minute to familiarise yourself with our Social Media User Terms https://www.ing.com.au/pdf/Social_Media_User_Terms.pdf.

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