1.   Maximising Tax-Deductible Contributions: Historically, salary sacrifice has been a popular method to bolster one's superannuation savings while enjoying tax advantages. Contributions made through this method are taxed at a favourable rate of 15%, compared to the individual's marginal tax rate, which can reach up to 45%. Recent changes have made these pre-tax contributions, known as concessional contributions, more flexible. Individuals can inject funds into their super at any time and claim a tax deduction, up to the annual cap of $27,500. From 1 July 2024 the concessional contribution cap will increase from $27,500 to $30,000.
 

2.   Leveraging Catch-Up Contributions: Individuals with a super balance below $500,000 at the beginning of a financial year can tap into unused concessional contribution caps from the previous five years. This presents a valuable tax planning opportunity, particularly for those experiencing significant capital gains events, such as selling investments, as they can mitigate a substantial portion of the tax liability by channelling additional funds into their super.

3.   Harnessing Co-Contributions: The government offers incentives for lower-income earners by matching contributions of up to $500 annually for those who deposit $1000 of after-tax income into their super fund. Eligibility varies based on income, with individuals earning below $58,445 qualifying for partial co-contributions, and those earning under $43,445 eligible for the full $500, providing an impressive 50% return on their investment.

4.   Utilising Spouse Contributions: Couples can optimise their super balances and tax savings by contributing to the account of a low-income spouse. Individuals can claim a tax offset of up to $540 by depositing $3,000 into their spouse's fund, provided the spouse earns below $40,000.

5.   Implementing Super Splitting: As couples approach retirement, maintaining similar super balances becomes crucial for managing asset caps, retirement income, and insurance. Super splitting allows individuals to transfer up to 85% of their pre-tax super contributions from the previous financial year to their spouse's account, subject to their fund's policies.

6.   Capitalising on Age Advantages: Transferring superannuation funds into the account of a younger spouse as one partner reaches pension age can strategically shield assets from Centrelink's assets testing, potentially increasing eligibility for age pension benefits.

7.   Exploring Downsizing Opportunities: Individuals aged over 55 who downsize their homes can inject an additional $300,000 from the sale proceeds into their super without affecting other contribution caps. This includes the annual $110,000 cap for after-tax contributions (to rise to $120,000 after 1 July 2024), providing a valuable avenue for boosting retirement savings.

If you would like to discuss any of these strategies further we recommend contacting your Financial Planner.