The Super easy way to boost your retirement savings

Superannuation is an important aspect of financial planning, especially as you approach retirement age. The end of the financial year is a good time to review your superannuation contributions and make any necessary changes to ensure you are on track to achieving your retirement goals. By making contributions before June 30, you can potentially reduce your tax bill, boost your retirement savings, and take advantage of any government incentives or co-contributions.?

This article will provide an overview of the benefits of making regular contributions to your superannuation fund, the types of superannuation contributions you can make, and how the government co-contribution scheme works.?

Why is it important to make regular contributions to your superannuation fund? ?

Every employer in Australia is obligated to contribute 10.5% of your salary toward your superannuation fund, however some employers may contribute more than this. ??

According to the Association of Superannuation Funds of Australia (ASFA), the average superannuation balance for Australians aged 60 to 64 is $310,635 for men and $196,750 for women as at September 2021. ?

While this may seem like a significant amount, this balance is unlikely to provide a comfortable retirement for many people. ASFA estimates that to achieve a comfortable retirement, a couple needs a superannuation balance of around $640,000, while a single person needs around $545,000. ?

This highlights the importance of making regular contributions to your superannuation and seeking professional advice to ensure you are on track to achieve your retirement goals.?

The benefits of making contributions to your superannuation fund ???

Making regular contributions to your superannuation has several benefits, including:?

• Saving for retirement: Making regular contributions can help boost your superannuation balance and ensure you have enough money to fund your retirement.
• Investment growth: Your superannuation fund invests your contributions in a range of assets, such as shares, property, and fixed income. Over time, these investments can grow in value, helping your retirement savings to grow.?
• Reducing tax: Superannuation contributions are taxed at a lower rate than your regular income, so making contributions can help to reduce your tax bill.?

Keep in mind that while contributions can help you save tax and boost your retirement savings, superannuation can only be accessed once you have met a condition of release (i.e. reaching preservation age, or retirement).?

Different types of contributions you can make to your superannuation fund ?

There are three types of contributions you can make to boost your superannuation balance and reduce your tax bill:?

Concessional contributions are contributions made to your superannuation that are taxed at a lower rate than your normal income tax rate. These contributions include employer contributions, such as superannuation guarantee contributions, as well as personal contributions that you claim as a tax deduction.

The current concessional contribution limit is $27,500 per tax year for all individuals. However, if you haven't used your full concessional contribution limit in previous years, you may be eligible to make additional contributions under the catch-up contributions rule. This rule allows you to carry forward any unused concessional contribution cap amounts from the previous five financial years and use them in later years, provided you meet certain eligibility criteria.?

Non-concessional contributions are contributions made to your superannuation from your after-tax income, and are not subject to the concessional contributions cap. The current non-concessional contribution cap is $110,000 per tax year, or up to $330,000 over a three-year period if you meet certain eligibility criteria. However, if your total superannuation balance is above a certain threshold, you may not be eligible to make non-concessional contributions.?

?Spouse contributions are another way to utilise tax benefits from superannuation contributions. If your spouse earns less than $40,000 per year and you make an eligible contribution to their superannuation account, you may be eligible for a tax offset of up to $540. Again, eligibility criteria and contribution limits will apply, and the contribution must be made before the end of the financial year to be eligible for the tax offset. If you are considering making spouse contributions, it's worth checking with your superannuation fund or financial adviser to ensure it aligns with your financial goals and needs.?

Note: If you exceed the contribution caps, you may be subject to additional tax. As always, consider your personal circumstances and seek professional advice before making concessional contributions to ensure it aligns with your financial goals and needs.?

What is the government co-contribution scheme?

The government co-contribution is a scheme that can help boost your superannuation balance. If you make eligible personal superannuation contributions and earn less than $57,016 per year, the government may contribute up to $500 to your superannuation account. The amount of the co-contribution depends on your income and the amount of personal contributions you make. Eligibility criteria and contribution limits apply, so it's worth checking with your superannuation fund or financial adviser to see if you are eligible for the scheme.?

In conclusion, contributing to your superannuation is an effective way to save for a comfortable retirement and reduce your tax bill. To make the most of the tax benefits, it's important to make timely contributions and understand the contribution caps and deadlines.

Contributing additional payments to your superannuation fund may not be appropriate for all circumstances and Division 293 tax may apply for high-income earners. For these reasons, it’s always best to seek professional advice to ensure you are making the most of your superannuation and achieving your retirement goals.?

For professional advice on boosting your Super contributions or any aspect of your financial world, talk to Tribeca by calling 1300 388 285 or go to https://www.tribecafinancial.com.au???