Baby Boomers

Pay less tax now while you’re building for tomorrow

Like most things in life, the best way to secure your financial future is to start with clear goals in mind. Below you’ll find some clever ideas for making the most of your super dollar:

Did you know if you arrange with your employer to put some of your pre-tax salary into your super, the most you’ll pay on the contribution and investment earnings is 15%? This compares with your marginal tax rate which could be as high as 46.5%1.

If you’re self-employed or not employed, similar benefits are also available if you invest in super and claim a tax deduction3 for it.

Four super boosters

Bump up your bonus

Salary sacrifice your bonus into super rather than receiving it as cash. This reduces the tax on your bonus by up to 31.5% and allows you to make a larger after-tax investment.

Invest personal assets in super

The tax-effectiveness of saving through your super fund can be really powerful. This is because investment earnings are taxed at a maximum rate of 15% and all benefits received at age 60 or over are completely tax-free.

With this in mind, why not consider cashing in an asset and making a personal after-tax super contribution? This strategy works really well if your money is currently invested in a term deposit or other asset where you won't have to pay capital gains tax (CGT) on withdrawal. And even if you do have to pay CGT on assets such as shares, the tax benefits of super may more than offset the impact of CGT.

A helping hand

If you earn less than $61,9202pa you could be eligible to receive a Government co-contribution to your super.T o qualify for the full co-contribution of $1,000 you generally need to make a personal after-tax super contribution of at least $1,000, and earn less than $31,9202 per year. A reduced co-contribution may be payable if you contribute less than $1,000 and/or earn between $31,9202 and $61,9202 pa.

Stump up for your spouse

If you have a spouse who earns less than $13,800, make an after-tax super contribution on their behalf so you can receive a tax offset of up to $540 while increasing your spouse's retirement savings.

1 Includes a Medicare levy of 1.5%

2 Includes assessable income, reportable fringe benefits and reportable employer super contributions.

See FDFL's Retirement Planning and Superannuation services.