Rushing to get things done opens the door to mistakes, or missing out all together and it’s no different with your finances.
With the end of this financial year is just around the corner, now marks the perfect time to check in on your savings to make the most of any concessions available to you.
You can up the ante of your retirement savings by having your employer direct some of your pre-tax wage to your super fund, commonly known as salary sacrificing.
Doing this can reduce your overall tax bill for the year as money going to super is only taxed at 15 per cent, a lower rate than many pay on their regular salary.
There is a limit to the amount of money you can put into super from your employer, so it would be wise to confirm you will be below the upper threshold before arranging an extra payment with your payroll department.
For those under 50, up to $30,000 can be contributed by your employer. Over this age, the amount is $35,000.
You can also boost your retirement savings by making a personal contribution, using money you have saved.
Not only does cash going into super this way incur no tax on arrival, any capital gains or income earned are currently treated more favourably than in our personal name.
Getting money into super this way is limited to $180,000 each financial year.
There is also the option to combine three years’ worth of contributions and tip in up to $540,000 in one go. Opting for the later rules out the option to use any personal savings over the coming two financial years.
Anyone earning less than $50,454 this financial year is incentivised to make a personal contribution.
The prize is a direct payment to your super fund of up to $500 from the government for anyone that boosts their savings by up to $1,000.
For those eligible, the exact amount is a combination of the amount of income earned during the year and how much is contributed to super.
It’s not something you need to work out though - this money will be automatically paid to your super fund by the Australian Tax Office.
Taking a pension
Those aged 55 and above are entitled to access their super - by taking a pension - even if they are still working.
The benefit of taking a income from your retirement savings lies on the fact any savings in the pension phase don’t attract tax on capital gains or income.
The catch is, you must withdraw a minimum of 4 per cent, or a prorated equivalent of your pension account balance each year. And as you age, this amount increases.
Anyone under age 60 should be aware any money taken as a pension must be included in your annual tax return. This money can receive up to a 15 per cent tax offset against your ordinary tax rate.
If you are unsure of the options available to you, it could be wise to seek financial advice to explore all of your options and ensure you are within the rules.
With June 30 fast approaching, it’s time to organise your finances to ensure you have made the most of any concessions available to you this financial year.