Retirement might seem like a far-off prospect for some people, but working out how to maximise your nest egg can start at any time. The sooner you start, the better the potential.
Here are just some of the ways in which you can maximise your or your partner’s superannuation potential.
You can split up to 85% of your concessional contributions from a prior year with your spouse as long as they’re under their preservation age or under 65. This may be a strategy where your spouse has a low super balance (must be less than $500,000 before the start of the financial year) or is closer to retirement.
Contribution splitting can only be done after the end of a financial year.
You may be entitled to an income tax offset of up to $540 for superannuation contributions for the benefit of a lower income (under $40,000) or non-working spouse who is under age 75.
Under the First Home Super Saver Scheme, voluntary contributions to your super fund may be withdrawn to help buy or build your first home. Under the scheme, you can withdraw up to $15,000 of eligible contributions made over a financial year or up to $50,000 in total for all years, plus an amount that represents deemed earnings. Non-concessional contributions can be withdrawn tax-free. Concessional contributions and total earnings will be taxed at marginal tax rates with a tax offset of 30%.
If you are over age 60 and have sold your home, you may be eligible to make a once-off contribution of up to $300,000 (or $600,000 per couple).
For those eligible, there is no need to meet a contributions work test and the contribution is not subject to the prohibition on making additional non-concessional contributions where your total super balance is more than $1.7 million.
If you do not have an agreement in place, then consider establishing a salary-sacrificing agreement with your employer for the 2023-24 financial year. From 1 July 2023, your salary sacrifice agreement will need to take into account that the super guarantee rate has increased to 11%.
Don’t forget to take advantage of the 5-year rule for carrying forward contributions! The 23-24 financial year is the last year that contributions using any leftover concessional contribution cap from 18-19 financial year can be used.