If you’re lucky to have met the love of your life, it’s well worth working together to get the most out of all aspects of your life – including financially. As a force of two you can maximise your efforts in securing your future – you can double your savings, reach goals twice as quickly, such as saving for a house deposit and cover each other’s backs when financial situations change. The foundation of your finances, would include your super – after all it will become your savings of tomorrow. So here are some tips on how you can save and make the most of your hard-earned money for a lifetime – as a team.
Have the chat
Talking about money is never easy, but it could help you both set goals and motivate you to get onto the property ladder. By making Super a discussion point you could potentially save money in tax, and set yourselves up for growing old and grey together.
Instead of looking at both of your super accounts as separate assets, you could work together to maximise your benefits. Few people realise that you can contribute to your partner’s super if you are married or in a de-facto relationship:
If your partner is working part time, not working, or earns less than you, you may be able to contribute to their super. This becomes particularly relevant if your partner is taking maternity or parental leave giving them a bigger nest egg when they come to retire not to mention the added tax benefits. (There is nothing like the joy of having a baby to throw your finances into a minor spin.)
Doing the splits
To stay ahead with your super with varying incomes, you can look at ‘contribution splitting’ – this is when you split your concessional (before tax) contributions. You can either arrange to split the compulsory contributions you get from your employer across yours and your partner’s super fund, or choose to split your contributions through salary sacrifice – optional pre-tax contributions from your salary.
As well as giving your partner’s super an ongoing surge, the money you contribute will generally be taxed at 15% where the total contributions made to your partner’s super account for the financial year are within the concessional contribution caps – rather than your usual marginal income tax rate. So compared to putting money into savings, for most it’s a winner. Of course, you should consider your objectives, needs and requirements and discuss any potential super strategies with your accountant or financial adviser.
Then there’s these
Another way to boost your partner’s super is with ‘spouse contributions’ – contributions you can make at any time with your after-tax pay. You may be able to claim a tax-offset for these contributions too.
If your income is less than your partners make sure you speak to them about the different options open to you to help you keep up with your super. (Remember to keep the chats going rather than making it a one one-off situation!) Your partner will need to ensure they do not exceed their non-concessional contributions cap.
A consideration for first-timers
If you’re saving for your first home, have a chat about the FHSSS – the government’s new First Home Super Saver Scheme (FHSSS).
To help people get onto the property ladder, the scheme lets you make voluntary, before or after tax super contributions. You can then withdraw the amount once you’ve found your first home.
The benefit is that you should be able to save money for your first home inside your super quicker because the additional voluntary concessional contributions are taxed at 15%, rather than your usual marginal income tax rate.
The maximum you are able to withdraw is $30,000 – a great help towards your first home. However, if you and your partner are both eligible and contribute, you could save and withdraw $60,000 between you – an even faster and bigger step towards your dream home.
As you go through life, your circumstances are going to change. One of you may end up earning more than the other, taking a career break or going part time. Or perhaps you both decide to take the plunge and decide to start a family. To stay on the front foot, keep track of where you’re heading with your finances, and support each other through the ups and downs. Amongst the fun and mayhem, keep your super and savings balanced and pay regular attention to both. You’ll both want to kick back together and make the most of your super when the time comes.
Diversa Trustees Limited ABN 49 006 421 638, AFSL 235153, RSE L0000635 is the Trustee of the ING Superannuation Fund ABN 13 355 603 448 (Fund) and the issuer of interests in the Fund. ING Living Super is a product issued out of the Fund. ING, a business name of ING Bank (Australia) Limited ABN 24 000 893 292, AFSL 229823, is the Promoter of the Fund and the issuer of this document. The insurance cover offered by the Fund is provided by MetLife Insurance Limited ABN 75 004 274 882 AFSL 238096. You should consider the Product Disclosure Statement and Financial Services Guide available at ing.com.au and the product’s appropriateness when deciding whether to acquire, or to continue to hold, the 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
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 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.