• About
  • Contact
  • Sponsorship
  • Join Now
  • Members Login
  • Search
  • Events
  • Webinars
  • Magazine
  • Education
  • Resources
  • Advocacy
  • Members
  • Log in
  • Search
  • Menu

  1. Home
  2. Magazine
  3. Nine super tips to consider before EOFY

Nine super tips to consider before EOFY

By Andrew Buchan*
Posted on 14 June 2021 — 09:00am in Superannuation, Financial Planning

  • Facebook
  • Twitter
  • LinkedIn
  • Email

With the end of the 2020-21 financial year fast approaching, don’t miss out on the opportunity to utilise these superannuation strategies before 30 June to help boost your retirement savings and potentially save on tax.

1. Contribute into super and claim a tax deduction

By contributing some of your after-tax income or personal savings into super, you may be eligible to claim a tax deduction. The contribution is generally taxed at up to 15% in the fund (or up to 30% if you earn $250,000 or more). Depending on your circumstances, this could potentially be at a lower rate than your marginal tax rate.

To claim a deduction, give your super fund trustee a valid “intent to claim deduction” notice and have it acknowledged by them. Keep in mind that personal deductible super contributions count towards your annual before-tax (or concessional) contributions cap. Concessional contributions also include all employer contributions, including Superannuation Guarantee. The concessional contribution cap is currently $25,000 for the 2020-21 financial year and any contributions you make above this limit may attract additional tax.

You may be able to contribute more than the standard concessional contribution cap if you have unused concessional contributions accrued from 1 July 2018 and have less than $500,000 in total super balance* on 30 June 2020.

2. Consider making a one-off super contribution

After-tax (or non-concessional) super contributions are made with money you’ve already paid income tax on such as personal savings. They are contributions you won’t be claiming a tax deduction for.

Contributing to super can be a tax effective strategy as earnings for investments held within super are taxed at up to 15%. This can compare favourably to investment earnings earnt outside super which are taxed at your marginal tax rate.

The annual limit for after-tax contributions is currently $100,000, provided your total super balance is below $1.6 million at the start of the financial year.

In some circumstances, you can bring forward three years of after-tax contributions into one year. This is known as the bring forward provision. It allows you to contribute up to $300,000 if you haven’t triggered the provision in the previous two years and your total super balance is below $1.6 million on 30 June 2020.

If your total super balance is close to $1.6 million, you can only access the annual contribution cap.

Remember, once you’ve put money into your super fund, you won’t be able to access it until you reach preservation age or meet another “condition of release”.

For more information on conditions of release, visit www.ato.gov.au and search ‘condition of release’.

*Your total super balance includes accumulation and retirement phase interests plus rollovers between each phase. If you have a self-managed super fund with an outstanding limited recourse borrowing arrangement, this value is also counted. Any personal injury or structured settlement contributions are deducted.

3. Watch your Total Super Balance

If your total super balance is currently more than $1.6 million, it’s worthwhile to check whether your total super balance was less than $1.6 million on 30 June 2020. If your total super balance was less than $1.6 million on 30 June 2020, this might be your last chance to make a non-concessional (after-tax) super contribution. Your financial adviser can work this out for you.

4. Get a super top-up from the Government

To encourage low-income earnings to grow their retirement savings, adding to your super with after-tax money could entitle you to a Government co-contribution worth up to $500 if you earn less than $54,837 and are aged below 71 on 30 June 2020. You must have a total superannuation balance of less than $1.6 million at the start of the financial year also.

The Government will automatically make the maximum co-contribution of up to $500 if you earn less than $39,837 in the 2020-21 financial year and you’ve made an after-tax contribution of at least $1,000. The co-contribution amount reduces as your income rises, reaching zero if your annual income is $54,837.

5. Boost your spouse’s super and claim a tax offset for yourself

If your spouse or partner’s assessable income is less than $40,000 in a financial year, you can make super contributions on their behalf and potentially claim a tax offset for yourself.

For spouse or partners who earn less than $37,000, the maximum tax offset is $540 in the 2020-21 financial year. This amount gradually reduces to zero if they earn over $40,000 in a year.

6. Split contributions to your spouse to equalise super balances

You can split up to 85 percent of concessional contributions (up to the concessional contribution cap) made during a financial year with a spouse, provided they are not over the age of 65 or reached their preservation age and retired. The application to split contributions must generally be made before the end of the financial year, immediately after the financial year in which the contribution was made.

If you want to split concessional contributions made in the 2019/20 financial year you must lodge the application with the super fund before 30 June 2021.

7. First Home Super Saver Scheme

If you are saving for your first home, you can make voluntary contributions to help save for a deposit. These contributions, and any associated investment growth, can be accessed subject to eligibility criteria. The total you can contribute and save towards the scheme is capped at $15,000 a year and the maximum you can access is capped at $30,000.

You can contribute a mix of before and after-tax contributions. Superannuation Guarantee contributions from an employer and those over the contribution caps cannot be accessed.

8. Protect your income in a tax effective manner

If you are working and rely on your income to support yourself and your loved ones, consider an income protection insurance policy which pays up to 85% of your pre-injury income if you’re unable to work due to an accident or sickness.

By purchasing an income protection insurance policy in your own name outside of super, you may be eligible to claim premium payments as a tax deduction this financial year.

9. Prepay interest on investment loans

Borrowing to invest can be a tax-effective means of wealth accumulation. If you borrow to invest into shares, managed funds, listed securities or any other asset that generates assessable income you can claim a tax deduction on the interest of the loan. You can prepay interest on your investment loan before 30 June and claim a tax deduction in the current financial year. This may help you with your cashflow.

*Andrew heads the Wealth Management and Superannuation divisions at HLB Mann Judd Brisbane, bringing to the role over 20 years’ experience in financial planning. In 2013, Andrew was awarded Top 10 honour roll status in the penultimate Australian Financial Review Smart Investor Master Class. Andrew was named Australian Unity (QLD) Adviser of the Year 2016, 2017 and 2018 and was recognised by the Financial Standard as one of the 50 most influential advisors in Australia for 2017. 

Post your comment

We welcome comments as long as they're respectful, on topic and not defamatory. It may take a day or so to approve them.

Comments

No one has commented on this page yet.

Popular Articles

  • Super changes you need to know about
    by Shane Ellis*
  • SMSF estate planning and death benefit nominations
    by Shane Ellis*
  • Seven steps for managing inheritance
    by Vanessa Stoykov*
  • Australians snap up gold as market uncertainty rises
    by Jaspar Crawley*
  • Five retirement planning pitfalls to avoid

Subscribe to Investors Voice Magazine

AIA Investorvoice TIPT Aug 300x250 1 v2
Advertisement
Advertisement

Lucy PercyFive variations to a testamentary trust for you to consider

Testamentary trusts are important to consider in estate planning. They can only be created by being included in a Will prior to death (it’s either in there or not, there are no second chances to add it in later).

Last year the AIA worked with lawyer, Lucy Percy of Head & Heart Estate Planning who delivered a series of articles and a webinar on estate planning and testamentary trusts which was exclusive to members.

Subscribe to our newsletter now and find out the five variations to a testamentary trust Percy suggested that you might like to consider.

Don't show this form again

By entering your details here you are agreeing to receive our monthly newsletter, Investors Voice and other partner promotions.

Subscribe to Investors Voice Magazine

Stay up to date with our latest news, education and events

  • About
  • Contact
  • Sponsorship
  • Join Now
  • Facebook
  • Twitter

Events
  • Upcoming webinars
Webinars
  • Past Webinars
Magazine
  • Investing
  • Shares
  • Property
  • Bonds
  • Cryptocurrency
  • Diversification
  • Superannuation
  • Financial Planning
  • SMSF
  • Economics
  • Stock Picking
Education
  • Investment Basics
  • Fixed Income
  • Shares
  • Property
  • Other Investments
  • Portfolio Management
  • Borrowing
  • Superannuation
  • Estate Planning
Resources
  • Investors Voice
  • Past Webinars
  • Papers Presented
  • Video Presentations

25 Years
  • Disclaimer
  • Privacy
Copyright © 2022 Australian Investors Association
ABN: 75 052 411 999
  • Home
  • About AIA
    • Association Information
      • National Council
      • State Organisers
      • AGM Details
      • Constitution and ByLaws
    • Member Benefits
  • Events
    • Upcoming webinars
  • Webinars
    • Past Webinars
  • Resources
    • Investors Voice
    • Past Webinars
      • Finding ASX Winners
      • Finding ASX Winners
    • Papers Presented
      • Conferences
        • National Conference 2019
        • National Conference 2018
    • Video Presentations
      • 2019 AIA Annual Conference
      • 2018 Sydney Investment Summit
      • 2018 AIA Annual Conference
      • 2017 AIA Annual Conference
  • Education
    • Investment Basics
      • Budget Basics
      • Net Worth
      • Psychology of Investing
      • Investing Goals
      • Risks
      • Power of Compounding
      • Investment Structures
      • Asset Classes
      • Glossary of Terms
    • Fixed Income
      • Savings Accounts
      • Term Deposits
      • Cash Management Trusts
      • Interest Rate Securities
        • Government Bonds
        • Corporate Investments
    • Shares
      • Understanding Shares
        • Common Terms
        • Risks & Benefits
        • Shareholder Rights
        • Types of Shares
        • ASX Sectors
      • Getting Started
      • Mechanics of Investing
        • Choosing a Broker
        • Making an Investment
        • Initial Public Offering ( IPO )
        • Corporate Actions
      • Fundamental Analysis
        • Fundamental Analysis Basics
        • Fundamental Investing Strategies
      • Technical Analysis
        • Technical Analysis Explained
        • Technical Analysis Tools
      • Exchange Traded Funds (ETFs)
      • Derivatives
        • Warrants
        • Contracts for Difference (CFDs)
    • Property
      • Residential Property
      • Commercial Property
      • Real Estate Investment Trusts
      • Property Syndicates
    • Other Investments
      • Managed Funds
      • Hedge Funds
    • Portfolio Management
    • Borrowing
    • Superannuation
      • What is Superannuation?
      • Types of Funds
      • SMSF
    • Estate Planning
      • Wills
      • Powers of Attorney
      • Testamentary Trusts
  • Magazine
  • Advocacy
    • The Retirement Income Review
  • Members
    • Frequently Asked Questions
  • Sponsorship
  • Contact
  • Join Now
  • Blog
  • Policies
    • Privacy Policy
    • Disclaimer
  • Home, Promo - Events
  • Summit 2021
    • Tickets & Pricing
    • Program
    • XTalks
      • How to Add XTalks to Your Schedule
    • Event App & Livestream Platform
    • Speakers & Experts
    • Venue & Transport
    • Sponsors
    • FAQs
    • Covid Safe Event