6 Ways To Boost Super
Boost your super it’s easier than you think
Are you saving enough in your super? Don’t know how to contribute more?
We will provide you with six easy ways to increase your super contributions.
- Government co-contributions – You can double the money you invest by taking advantage of government incentives. Turn $5 into $10 invested with government co-contributions. (conditions apply).
- Salary sacrifice – By allocating more of your pre-tax impcome into your super you can increase your super and minimise your tax.
- Converting assets to super environment – A favourable tax treatment can result from selling your assets and putting the money into your super.
- Making up for past contributions – After the age of 50 you can make up for past years in your superannuation.
- Partner contributions – Contribute to your spouse’s super to receive tax benefits. You may also check if your partner could benefit from the government co-contribution.
- Consolidating your super – By consolidating your super you may be able to lower your fees and make it easier to manage.
What should I know about salary sacrifice?
Salary sacrifice is when money is regularly deducted from your salary before taxes. Another name for this is salary packaging. Salary sacrifice can be a great way to make contributions to your superannuation.
Advantages:
- Contributions are taxed at a lower rate in the fund than most personal tax rates. As a result you will have more money accruing for retirement than if you invest funds after taxes.
- Contributions made through a salary sacrifice are Fringe Benefit Tax (FBT) exempt.
There is more to salary packaging than salary sacrifice. A financial advisor can assist you with structuring your benefits to suit your individual financial needs.
personal contributions
Contributions can be made from your after tax salary to augment your super. The best part about your super is that it allows you to contribute any time during your working years, allowing you to take advantage of tax benefits.
It is very tax effective since returns are taxed at a lower rate compared to normal tax rates on your income which can reach as high as 46.5 percent.
It is important to consider the following before placing funds in a super fund:
- When you plan to retire
- Current level of savings
- How much income you will need
- How many years until you retire
- Your lifestyle plans upon retirement
Spouse contributions
Your super contributions can also be raised by making an after tax contribution to your spouse’s super fund. That will help you and your spouse to achieve a higher amount of joint retirement savings.
Contributing to a spouses superannuation offers excellent tax benefits if your spouse earns less than $10,800 a year or is not working. You will be eligible to claim an 18 percent tax offset on any contributions made up to $3,000. It is recommended that you seek professional advice before making spouse contributions to learn more about the tax laws that govern them.
Consolidating your super will lower fees
If you have switched jobs you probably have multiple super accounts. It is recommended that you consider combing them into one account which will allow you to save on administration fees.
With amounts that are under $200, superannuation laws allow for you to take the funds when you leave an employer. Taking the money may result in having to pay take though another option is to roll it over into the super fund of another employer.
Special rules are in effect for supers with under $1000 regarding administration fees that are taken out of your account.
If you have a good balance in your superannuation fund, have you considered Self-managed Superannuation (SMSF)?
Learn more about how you can bolster your superannuation savings and realise tax benefits all in one by downloading FREE ebooks about superannuation or booking an appointment with an iMoney financial advisor today.
Try our FREE financial planning consultation right now.
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