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Superannuation - Questions which should be considered

By Vicki Alateras, 01/06/2014

How Tax effective is super?

Consolidate your super - It's much easier to keep track of your money if it's in one account and usually with lower fees.

Beef up your super savings - The before-tax contributions (also known as concessional contributions) , and performance returns you may earn inside super are taxed at 15%. For many people, saving through super is much more tax effective than saving the same amount outside super.

Salary Sacrificing - This simply involves agreeing with your employer for some of your pre-tax salary to be paid directly to your super fund, before income tax is deducted. This should reduce the amount of tax you pay. For more information refer to salary sacrificing - boost your retirement funds

Spouse contributions - In many cases one spouse accumulates the lion's share of the super. Boosting your spouse's super can reduce your family's annual tax bill.

Tax rebate for additional spouse contributions - If your spouse earns less than $10,800 pa, you can make a $3,000 after-tax contribution (also known as a non-concessional contribution) to their super account. This may qualify you for a tax rebate of $540. This strategy can be used each year.

Co-contributions - let the government top up your super. People who earn less than $34,488 a year can potentially receive a $ 500 helping hand from the government via a free 'co-contribution' into their super fund. If you earn $34,488 to $49,488 a year, you can still receive a super co-contribution but it will be adjusted depending on your income and how much you personally contribute.

Take a long-term view - Super is generally a long-term investment (i.e. seven years or more). And since you can't access your money until you retire, you might want to think about using a growth investment strategy.

Beware of the caps - There are caps on the amount of concessional (before tax) and non-concessional (after tax) contributions you can make each year. Please contact us for more information on concessional and non-concessional caps.

Contact us for a free initial consultation with one of our expert advisers.