Make this New Year’s resolution one that creates a measurable difference in your life by taking some simple steps to boost your superannuation.
Your financial adviser is always looking after your financial health, but it helps if you are as familiar as you can be with your investments. The downtime around New Year is a logical time, between meetings with your financial adviser, to re-acquaint yourself with your superannuation and make sure everything is on track.
At the same time, there are several simple steps you can take to boost your fund’s eventual value. But first let’s do an update on annual contribution caps.
Concessional contributions are before-tax contributions taxed at a maximum of 15% (unless you earn over $300,000 a year). For many, this means these contributions will be taxed less than their income tax. For many, this means these contributions will be taxed at a lower rate than their marginal tax rate. Extra contributions from your salary then, can be tax-effective. But there is a limit.
If you were 49 or younger on June 30, 2015, your concessional limit for the 2015–16 financial year is $30,000. This includes all compulsory employer payments. If you were 49 or older on that date, your limit is $35,000.
Non-concessional, or after-tax payments, are capped at $180,000 for the 2015–2016 financial year. Those under 65 may bring forward two or more years of non-concessional payments, allowing a non-concessional limit of $540,000 in that year.
Keeping these limits in mind, let’s explore superannuation boosting options.
Make concessional contributions:
Organise with your employer for an amount, however small, from your regular salary to be paid into superannuation. This can make a real difference to your final balance and may reduce income tax.
Check investment options:
Investigate how your super fund has invested your money. Is it too conservative or aggressive? If you think it doesn’t fit your current risk profile, speak with your financial adviser.
Calculate your fund’s fees:
A superannuation fund’s management fees can make a big difference to your final balance. Check your fund’s fee levels and consider shopping around for a better deal.
Seek government co-contributions:
If your income is $35,454 or less, the government will pay, up to a maximum of $500 annually, 50 cents for every after-tax dollar you contribute. And if you earn up to $50,454 annually you may be eligible for a lesser contribution.
Set a retirement date:
No matter how far away retirement may be, you can only plan your financial future when you have set a date. Of course it will change, but it will allow you to figure out exactly how much needs to go into your superannuation in order to meet your lifestyle goal.
Obviously these are all areas your financial adviser is best advising you on as they know your individual situation.
Information in this web page is based on regulatory requirements and laws, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Financial Wisdom, its related entities, agents and employees for any loss arising from reliance on this document.
This web page may contain general advice. It does not take account of your individual objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision.