The end of the financial year is fast approaching, making now the ideal time to review your super. Even small additional contributions before 30 June can make a big difference to your retirement savings over time, thanks to the power of compounding returns.
This checklist outlines five smart ways to boost your super before 30 June, each with its own limits and requirements. Our Geelong financial advisers at LBW can guide you through the options and help you choose the strategies that best align with your goals.
1. Use concessional (before-tax) contributions to boost super
Make the most of your annual cap
You can contribute up to $30,000 in concessional (before-tax) superannuation contributions each year. This includes employer super payments and any salary-sacrifice contributions you choose to make. These contributions are taxed at 15%, which is usually lower than your income tax.
If you haven’t reached the $30,000 cap, you can top up before June 30. Additionally, you can salary sacrifice or deposit after-tax money and claim a tax deduction. To claim the deductions, complete the ATO form and get confirmation from your super fund before lodging your tax return.
Super funds receive many contributions in June. Some have cut-off dates one to two weeks before June 30. Therefore, it’s essential to contribute early and stay within the cap. Moreover, add up your employer and personal contributions to check your total.
Catch up with carry-forward rules
If your super balance stayed under $500,000 on June 30 last year, you can carry forward unused concessional contributions from the past 5 years. For example, if you only contributed $15,000 in 2019-20, you can add the unused $10,000 this year. That gives you a $40,000 cap this year.
Many people have unused cap amounts worth thousands. You can check your cap in your MyGov account or ask one of our Geelong financial advisers to help.
2. Add after-tax and downsizer contributions
Grow your super with non-concessional contributions
These after-tax contributions don’t qualify for a tax deduction. But they help move more of your savings into super. Super investment earnings are taxed at 15% before the age of 60. After 60, if you retire and start a pension, you don’t pay tax on income or capital gains.
You can contribute up to $120,000 each year. And, if you meet the rules, you can use the bring-forward option to contribute up to $360,000 in one year. You can also contribute $120,000 before June 30, then use the $360,000 rule from July 1st. Get advice to make sure you meet the conditions from one of our Geelong accountants or financial advisers.
Downsize your home and boost your super
If you’re 55 or older and have sold your main residence, you can contribute up to $300,000 into your super. This downsizer contribution doesn’t count towards your regular cap, but it counts towards your pension transfer cap.
You must have owned the home for at least 10 years. The property must be in Australia and not a caravan or houseboat. You need to contribute the funds within 90 days of settlement. However, in some cases, the ATO allow longer time. Check the rules on the ATO website or speak to a Geelong financial adviser or accountant for guidance.
3. Support your spouse and plan smart
Share your super contributions with your spouse
You can split your superannuation contributions with your spouse. You can roll over part of your concessional contributions or make a direct contribution to your spouse’s super. When you make a direct contribution, your spouse may receive a tax offset. This depends on your spouse’s income and other factors.
You must complete the split by the end of the financial year. Your spouse must be under 60 or between 60 and 65 and not retired. Check with your super fund to make sure it allows contribution splitting.
Get support with your super plan
Rule around superannuation contributions can get complex. Contribution types, limits, and timings can affect your tax and retirement outcomes. If you’re unsure what to do before June 30, our Geelong financial planning team can help. We’ll explain your options and help you avoid mistakes.
Speak with our Geelong financial advisers today
Superannuation contributions done right, can grow your balance and improve your financial future. Our Geelong financial advisers can help you plan with confidence whether we manage your funds or you have a self-managed super fund.
If you’ve like some help with your super, call (03) 5221 6111 or visit www.lbwca.com.au to speak with our team.
This blog provides general educational information only. The content does not take into account your personal objectives, financial situation or needs. You should consider taking financial advice tailored to your personal circumstances.
LBW Business + Wealth Advisors is an Authorised Representative of LBW Wealth Pty Ltd ABN 56 652 382 128 AFSL 534569. Please see our website www.lbwca.com.au or call 03 5221 6111 for more information on our available services.
