As the end of the financial year approaches, now is a good time to check your Super and see what you could do to boost your retirement nest egg. What’s more, you could potentially reduce your tax bill at the same time.
There are a handful of positive changes to Super due to start next financial year, but for most people, these will not impact what you do before June 30 this year.
Amongst the changes from 1 July, the superannuation guarantee (SG) rate will rise from the current 10 percent to 10.5 percent.
As of 1 July, the $450 minimum monthly income threshold will be removed. This means that casual/part-time workers will be entitled to receive employer Super payments, regardless of how much they earn.
Another upcoming change is the abolition of the work test for retirees aged 67 to 74 years of age. Currently, you must satisfy the work test, which means working at least 40 hours during a consecutive 30-day period in the financial year in which the contribution is made. From 1 July, eligible Australians will be able to top-up their Super by making non-concessional (after tax) contributions, even if fully retired.
But remember, you still need to comply with the work test for contributions you make in this financial year.
Also on the plus side, is the expansion of the downsizer contribution scheme. From 1 July, the age to qualify for the scheme will be lowered from 65 to 60 years, although other details of the scheme will remain unchanged. If you intend on selling your home to downsize, which you have owned for at least 10 years, you may be eligible to make a one-off contribution of up to $300,000 to your Super (up to $600,000 for couples.) This is in addition to the usual contribution caps.
While all these changes are positive and something to look forward to, there are still plenty of opportunities, which could boost your retirement savings before June 30.
We asked our SAA Senior Responsible Manager, Kris McCleland, to share some of these key strategies, which you can read here.
As it can take your Super fund a number of days to process contributions, please don’t wait until the very last minute. And if you would like to discuss your Super options, please call now.