The end of financial year period is a great time to take stock, reflect on past events and tie up loose ends - and it’s also the perfect time to improve your financial position.
Below is a shortlist of small improvements and smart decisions to help you boost super, reduce tax, maximise government entitlements and build wealth.
Take advantage of Super Contribution Caps
The cap on concessional taxed super contributions has increased from $25,000 to $30,000, or $35,000 if you are aged 49+. Contributions not claimed in a previous financial year cannot be carried forward to the next financial year. Keep a close eye on your contribution limit, or you may pay extra tax.
Reduce your tax by making a one-off super contribution before June 30
Super is taxed at a maximum of 15%, while earnings on your investments outside of super are taxed at your marginal rate. Making an ‘after tax’ super contribution of up to $540,000 allows you to shift the earnings on your investments to the lower tax environment.
If you earn under $49,488 you may qualify for the Government co-contribution
Provided at least 10% of your income is from employment, the Government will boost your retirement savings by up to $500. Eligibility conditions apply, so talk to your adviser.
Salary sacrifice part of your pre-tax salary or bonus
Take advantage of low tax rates on super by diverting part of your pre-tax salary to super instead of taking it as cash.
Boost your spouse’s super and reduce your tax
If your spouse earns less than $13,800*, you can make an after-tax contribution to their super and grow their retirement savings whilst you gain a valuable tax offset.
Use your tax refund to reduce non-deductible debts or add to super
As tempting as it may be to splurge, paying off debts like your home loan or contributing extra to super is a more effective way to use your refund.
Ensure your minimum pension requirements are met
If you have an SMSF, confirm that your trustee obligations are met by taking your minimum pensions payment before 30 June.
Whilst the lead up to June 30 is a great time to sit down with your FMD adviser and explore ways to improve your financial position, a regular catch up is the best way to keep up with legislative changes and make the most of new opportunities.
Information presented here should not be acted upon without advice from your FMD adviser.
General advice disclaimer: This article has been prepared by FMD Financial and is intended to be a general overview of the subject matter. The information in this article is not intended to be comprehensive and should not be relied upon as such. In preparing this article we have not taken into account the individual objectives or circumstances of any person. Legal, financial and other professional advice should be sought prior to applying the information contained on this article to particular circumstances. FMD Financial, its officers and employees will not be liable for any loss or damage sustained by any person acting in reliance on the information contained on this article. FMD Group Pty Ltd ABN 99 103 115 591 trading as FMD Financial is a Corporate Authorised Representative of FMD Advisory Services Pty Ltd AFSL 232977. The FMD advisers are Authorised Representatives of FMD Advisory Services Pty Ltd AFSL 232977.