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Boosting your superannuation is a strategic way to secure a comfortable retirement. Here’s a closer look at several methods that can help:
Salary Sacrificing
- Definition: Salary sacrificing involves forgoing part of your salary and directing your employer to contribute it to your superannuation.
- Tax Advantage: Contributions are taxed at 15%, which is often lower than the marginal tax rate (up to 45%).
- Employer Obligations: Your employer must still pay the full super guarantee.
Claiming a Deduction on Personal Super Contributions
- Non-Concessional Contributions: These are made from your after-tax income and are not taxed further in your super fund.
- Concessional Contributions: By claiming a deduction, these contributions are treated as pre-tax income and taxed at 15%.
- Process: Notify your super fund of your intention to claim a deduction.
Government Co-Contributions
- Eligibility: Available to low and middle-income earners who make after-tax contributions.
- Benefit: The government may contribute up to $500 to your super account.
- Automatic Process: No need to apply; the ATO will automatically deposit the co-contribution if eligible.
Spouse Contributions
- Tax Offset: Up to $540 if you contribute $3,000 to a spouse’s super and their income is below $37,000.
- Eligibility Criteria: Both partners must meet specific requirements, and the benefit decreases as the spouse’s income approaches $40,000.
- Strategic Benefit: Helps ensure both partners have adequate super for retirement.
Practical Tips:
- Review Your Finances: Ensure you can afford a lower take-home pay if salary sacrificing.
- Maximize Deductions: Keep track of your contributions and claim deductions to optimize tax benefits.
- Monitor Eligibility: Regularly check your eligibility for government co-contributions and spouse contribution tax offsets.
- Spousal Planning: Coordinate with your spouse to maximize combined super benefits.
By understanding and leveraging these strategies, you can effectively boost your superannuation and work towards a more secure and comfortable retirement.
Book a complimentary consultation with our Fiducian Financial Adviser who can offer you professional, independent advice based on your circumstances.
Source: How your super can help you save on tax
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