Superannuation is something that a lot of people turn a blind eye to. We know it is there, we know it will be used for our retirement, but we don’t really pay it much attention. We should. For most people it will be their main source of income when they retire.
Following are some tips on how to boost your superannuation savings.
Tax Deductible contributions
Anyone under the age of 67 can make personal contributions into superannuation and claim a tax deduction for the contributions (concessional contributions). The maximum contribution from 1 July 2021 is $27,500. This includes any amount paid by your employer.
As well as boosting your superannuation balance, claiming the contribution as a tax deduction will potentially be a taxation benefit for you. The contribution will reduce your taxable income which will decrease the amount of tax payable.
Unused Concessional Cap Carried Forward
If you make or receive concessional contributions less than the annual concessional contributions cap ($25,000 up to 30 June 2021, $27,500 from 1 July 2021) you may be able to accrue these unused amounts, pay them into superannuation in subsequent years and claim a tax deduction.
To be eligible, your superannuation balance must be less than $500,000 on 30 June of the previous year. Unused amounts are available for a maximum of five years.
If you are earning more than your partner, you can contribute to your spouse’s fund and claim a tax offset in your personal tax return. Your spouse needs to be under 75 (and meet the work test if aged 67 to 75) and earning less than $40,000 to be able to claim an offset.
The tax offset is 18% of the contribution up to a maximum contribution of $3,000. The maximum tax offset is $540.
People aged 65 years and over, may be able to make a downsizer contribution of up to $300,000 each from the proceeds of selling their home. This contribution can me made regardless of work status, superannuation balance or contribution history. It is proposed to reduce the age limit from 65 to 60 from 1 July 2022.
There are certain conditions that need to be met and these can be found on our Superannuation Contribution Fact Sheet
Find Your Lost Super
If you have changed jobs, name, or address over the years, or worked part-time or casual jobs, there is a chance you may have lost track of some of your superannuation. You should follow-up with any superannuation fund that you think may be holding your superannuation.
The ATO also may be holding some unclaimed superannuation on your behalf. Super funds transfer balances to ATO where the amounts are small and inactive. Following this link to the ATO on how to search for lost superannuation.
Review Your Superannuation
Most superannuation funds will allow you to choose from a range of investment options and asset classes. This should be reviewed constantly to ensure the mix is right for your particular situation.
You should also review annually the fund’s performance; fees being charged, and insurance being held within the fund to ensure the returns you are receiving are being maximised.
Superannuation is a complex area, and we would recommend contacting your local Accru advisor to discuss any of your superannuation needs.
Our superannuation contributions fact sheet can be found here.