New financial year, new resolutions
It's a new financial year so it's time to put your feet up and relax. There's no need to worry about superannuation or tax for another 11 months or so....right?
Not necessarily. If you wait until next June, you may not have the spare funds to take full advantage of the government's incentives to save more. So you might lose out on some super concessions. And you could end up paying more tax than you need to.
Don't delay, act today
Rather than waiting until the end of the financial year and trying to play catch-up, it's never too early to put your plans in place to top up your super.
Whatever your situation, there are incentives to help you save for retirement and potentially save on tax.
You want to reduce your tax bill and save for your retirement
- You can sacrifice up to $30,000* per year (or $35,000* per year if you're turning 50 or over in 2014/2015) from your before-tax salary into your super at the concessional tax rate of 15%. That's potentially a big saving on your usual marginal tax rate.
*Please note your employer superannuation guarantee contributions will need to be factored into this limit
Your spouse earns less than $13,800 a year
- If you make an after-tax super contribution into your spouse's super account, you could receive an 18% tax offset of up to $540 and increase your spouse's retirement savings into the bargain.
You earn less than $49,488 a year
- If you make a personal after-tax contribution into your super, you may qualify for a government co-contribution of up to $500 and increase your retirement savings.
You have a lump sum to invest
- You may bring forward two years of non-concessional (after-tax) contributions and contribute up to $540,000 to your super in one financial year without going over the cap*. This can be particularly effective for lump sums, like an inheritance or the sale of a property. Once you turn 65, you won't be able to use the 'bring forward' rule.
*Please note this cap is over a period of three financial years.
You want to maximise your age pension entitlements
- You can transfer up to 85% of your concessional contributions into your younger spouse's super fund. Because super is not counted under Centrelink's assets test for people under the age pension age, this 'contribution splitting' can potentially enable the older spouse to qualify for more Centrelink benefits. And you'll help grow your spouse's super into the bargain.1
Like to know more?
Everyone's situation is different. So an AMP financial planner can help you decide whether the opportunities are suitable for your circumstances.
If you have questions about how to start planning for the new financial year, call AMP on 1300 158 587 or contact your AMP financial planner.