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End-of-year super strategies

With the end-of-financial year looming, there are some key strategies you can utilise to maximise your nest egg ahead of 30 June.

Maximise super contributions
Review your contribution types and amounts to ensure you have maximised (not exceeded) your contribution caps for the financial year. The non-concessional contributions cap for 2015/16 is $180,000 or $540,000 over three years for those under 65 at 1 July 2015. From 1 July 2017, a $500,000 lifetime non-concessional contributions cap is proposed to take effect. The concessional contributions cap is currently at $30,000 and $35,000 for those aged 49 or over at 30 June 2015. The lifetime CGT cap is $1,395,000.

Split contributions with your spouse
You can split up to 85 per cent of your 2015 concessional contributions with your spouse providing they are not over 65 years or have reached their preservation age and retired. If you split contributions they must be made before 30 June. This strategy will be increasingly important under the budget’s announcements to introduce a $1.6 million lifetime cap that can be held within the zero tax pension environment.

Make a spouse contribution
You can claim a tax offset of 18 per cent on super contributions of up to $540 per year where your spouse’s assessable income, total reportable fringe benefits amounts and reportable employer super contributions is less than $13,800. The tax offset for eligible spouse contributions cannot be claimed for super contributions that you made into your own fund, then split to your spouse.

Posted on 22 June '16 by , under Super.

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Transition to retirement

The transition to retirement (TTR) strategy allows you to access some of your super while you continue to work.

You are able to use the TTR strategy if you are aged 55 to 60. You can use it to supplement your income if you reduce your work hours or boost your super and save on tax while you keep working full time.

  • Starting a TTR pension: To start your TTR pension, transfer some of your super to an account-based pension. You have to keep some money in your super account so that you can continue to receive your employer's compulsory contributions as well as any voluntary contributions you may be making.
  • Government benefits and TTR: The benefits you or your partner receive might be impacted if you choose to opt for this strategy. How and what exactly will change might become clearer upon discussing this with a Financial Information Service (FIS) officer.
  • Life insurance and TTR: In some cases, the life insurance cover you have with your super may stop or reduce if you start a TTR pension – check this before making any decisions or changes.

TTR can help ease your mind as you transition into retirement but it can be a bit complex. Before you choose whether you want to use TTR to reduce work hours or save on tax, or even if you want to use TTR altogether, you should figure out how this will impact all aspects of your finances.

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