Start planning for a prosperous tomorrow right now with specialised superannuation advice from Newcastle Financial Planning Group.
Superannuation is the wealth accumulation vehicle most Australians rely on to fund their retirement lifestyle. And the sooner you invest your time and energy into a superannuation strategy, the more options you’ll have in retirement.
Explore your superannuation options
Whilst a majority of working Australians have a superannuation fund, many do not have the time or the inclination to give too much thought to the complicated and ever-evolving field.
NFPG can help you learn the best ways to maximise the benefits of your super. Explore your options below.
A salary sacrifice to super is where you and your employer agree to pay a portion of your pre-tax salary as an additional concessional contribution to your superannuation account. This is typically a tax-effective strategy if you earn more than $37,000 a year. Depending on your income and how much you are willing to contribute to super, a mix of concessional and non-concessional may be your best option.
Essentially, salary sacrifice becomes attractive to those earning above $37,000 p.a and it’s only taxed at 15% compared with your marginal tax rates.
You also need to ensure that your salary sacrifice contributions along with your Employer SG remain below the non-concessional contribution limit of $25,000 per financial year.
Spouse Super Contribution
From 1 July 2017, if the receiving spouse’s income is up to $37,000 p.a (phases out up to $40,000 p.a), you can make a contribution up to $3,000 p.a into the spouse’s super fund and be eligible to receive the tax rebate of 18% or $540 per year.
What you contribute will count towards your partner’s non-concessional contributions cap (the maximum amount that can be put into super after tax). The current limit is $100,000 per year.
The government co-contribution scheme rewards you for making personal non-concessional (after tax) contributions. If you earn less than $51,813 per year (before tax) and make non-concessional super contributions, you may be eligible for a matching contribution from the government, known as a government co-contribution.
If you earn less than $36,813 the maximum co-contribution is $500 based on 50c from the government for every $1 you contribute. It doesn’t matter whether you make small regular contributions or irregular lump sums, the co-contribution is based on the total amount of non-concessional contributions you make over a financial year.
The amount of co-contribution you are eligible for reduces the more you earn, however, you can earn up to $51,813 and still be eligible for something.
To receive the co-contribution, you will need to lodge a tax return for the year.
Low Income Superannuation Tax Offset
If you earn $37,000 or less you may also get a ‘low income superannuation tax offset’ from the government. The amount, up to $500 annually, will be 15% of the concessional contributions you or your employer made to your super account during the financial year.
You will get this payment whether or not you add extra money to your super. The ATO will automatically make these payments if you meet the criteria. Make sure your super fund has your tax file number so you don’t miss out.
First Home Buyers Account
The first home super saver (FHSS) scheme allows first home buyers to save a home deposit within their super fund. From 1 July 2017 any personal voluntary contributions you make to your super can be withdrawn to help buy or build your first home.
Under the FHSS scheme, you can withdraw up to $15,000 of eligible contributions made over a financial year or up to $30,000 in total for all years, plus an amount that represents deemed earnings.
Voluntary contributions made to defined benefit super funds are not eligible for release under the FHSS scheme.
Withdrawals can be made from 1 July 2018. To be eligible to withdraw funds under the FHSS scheme you must:
- Not have owned property in Australia before
- Be at least 18 years old
- Not have withdrawn money under the scheme in the past
Non-concessional contributions and earnings can be withdrawn tax free. Concessional contributions and earnings will be taxed at marginal tax rates with a tax offset of 30%.
You must enter into a contract to buy or build your first home within 12 months of making a withdrawal under the FHSS scheme or you will have to recontribute the amount back to super or pay additional tax on it.
Frequently asked superannuation questions
Superannuation is a complex area, and an effective strategy depends on a number of interrelated factors. Common questions include:
- Which superannuation fund is right for me?
- Should I consolidate my existing super funds?
- Is my superannuation invested in line with my goals?
- Do I have insurance inside of my superannuation?
- Who are my beneficiaries?
- Am I paying too much in fees?
- Can I contribute more money into my super and what are the benefits
- Should I invest in superannuation, pay off my debt or purchase assets personally?
Answers to these questions will necessarily differ from person to person, making expert guidance a must.
Secure your future with the right superannuation advice for you
With our technical skills and product knowledge, an NFPG Superannuation Specialist will work with you to review your current structure and develop tailored recommendations to secure your financial future and ensure your peace of mind.
Get started today, with specialised superannuation and planning advice from the friendly team at NFPG.