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16th February 2021 - Private Wealth
“Catch-up contributions really are a great tax-effective way to pump up your super.”
Super is a tax effective environment where the magical compounding returns can have a great snowballing effect over time. But many of us don’t get as much into super as we could. This year could be the ideal time to consider boosting your contributions.
How much do you currently have in super? You can use salary sacrifice to contribute up to $25,000 a year at the concessional tax rate of 15%. If your balance is below $500,000, and if you contribute less than $25,000 in a year you can carry that unused portion forward and make catch-up contributions the next year. Unused contributions can be carried forward for a maximum of five years.
Salary sacrifice isn’t the only way to make super contributions. You can also contribute money into super from your savings. Depending on the amount of your employer and salary sacrifice contributions, this contribution could also be claimed as a persona tax deduction. However, if you’ve reached the $25,000 cap your contributions are classified as after tax personal contribution. These are also limited with a $100,000 per annum cap, or in some circumstances $300,000 over a three year period, for those with a total super balance less than $1.6m.
If you’re over 65 and you still want to get more into super, you can. New laws have moved the age limit for super contributions to 67. You may have two more years of contributions up your sleeve, so it’s well worth looking into.
If you think this is the year to top up your super, and you’d like to know more, talk to your Elston adviser. We’re here to help.
If you would like more information please call 1300 ELSTON or contact us to speak to one of our advisers.
This material has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained in this material is General Advice and does not take into account any person’s individual investment objectives, financial situation or needs. Before making an investment decision based on this advice you should consider whether it is appropriate to your particular circumstances, alternatively seek professional advice. Where the General Advice relates to the acquisition or possible acquisition of a financial product, you should obtain a Product Disclosure Statement (“PDS”) relating to the product and consider the PDS before making any decision about whether to acquire the product. You will find further details of the service we provide and any cost to you within the Financial Services Guide. Any references to past investment performance are not an indication of future investment returns. Prepared by EP Financial Service Pty Ltd ABN 52 130 772 495 AFSL 325 252 (“Elston”). Although every effort has been made to verify the accuracy of the information contained in this material, Elston, its officers, representatives, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this material or any loss or damage suffered by any person directly or indirectly through relying on this information.
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