As the end of the financial year approaches, it’s a great time to review your superannuation strategy. Making additional contributions to your super not only helps grow your retirement savings but can also provide valuable tax benefits.

Why Consider Extra Super Contributions?

Superannuation is one of the most tax-effective ways to save for retirement. Contributions made from your pre-tax income—known as concessional contributions—are generally taxed at 15%, which is often lower than your marginal tax rate. This means you could reduce your taxable income and potentially lower your overall tax bill.

Key Strategies to Consider

Salary Sacrifice Contributions

You can arrange with your employer to redirect a portion of your pre-tax salary into your super. This reduces your taxable income and boosts your retirement savings at the same time. It’s a simple and effective way to take advantage of the concessional tax rate on super contributions.

Personal Deductible Contributions

If you make a personal contribution to your super using after-tax income, you may be able to claim a tax deduction. This strategy can be particularly useful if you’ve received a bonus or other lump sum and want to reduce your tax liability for the year.

Catch-Up Contributions

If you haven’t used your full concessional contributions cap in previous years, you may be able to carry forward the unused amounts for up to five years. This can be a great opportunity to make a larger contribution in a year when you have extra income or a capital gain to offset.

Spouse Contributions

Contributing to your spouse’s super can also offer tax benefits. If your spouse earns a low or no income, you may be eligible for a tax offset by making a contribution on their behalf.

Things to Keep in Mind

• The annual concessional contributions cap is currently $30,000. Exceeding this cap may result in additional tax.
• To claim a tax deduction for personal contributions, you must notify your super fund and receive an acknowledgment.
• Contributions must be received by your fund before 30 June to count for the current financial year.

Taking proactive steps to boost your super before the end of the financial year can be one of the most effective ways to reduce your tax bill and enhance your financial future.

Whether you’re looking to make the most of concessional contributions, catch up on unused caps, or support your spouse’s retirement savings, there are smart strategies available to suit your situation.

At Enhance Financial Partners, we’re here to help you navigate your options with confidence – our team can work with you to tailor a superannuation strategy that aligns with your goals and maximises your long-term benefits!

Note that this advice is general in nature and does not take into consideration your personal circumstances, financial goals and needs. To ensure that these your contributions are in your best interest, we encourage you to speak to one of our Financial Advisers.