Let's get pumped about super.
End of Financial Year Deadline
This is our annual reminder about allocating funds to your superannuation fund BEFORE 30 June 2022. Not on the last day or even week of the financial year but it has to be deposited and cleared prior to 30 June 2022.
This always catches out some of those investors who get confused with the timing but as you have 365 days in the year to contribute, give us a call if you need discuss this strategy.
The annual limit whereby you can make a concessional contribution to claim a tax deduction for the financial year 2021 / 22 is $27,500.00 each per annum. This limit includes any SG (Super Guarantee) contributions made on your behalf by your employer. You need to take that amount off the $27,500.00 limit and the amount of super paid on your behalf should be noted on your payslip. If you can’t find it, give your H.R. or payroll office a quick call or email to obtain this amount.
This is the only urgent contribution that needs to be made before this financial year ends.
Our team is working with a number of clients where they have triggered significant capital gains taxes this financial year and there is a strategy that allows us to capture any unused concessional contributions from 2018 / 19 and claim a larger tax deduction. There are a number of conditions that need to be met here and if you need to discuss this then give our office a call very soon.
Below is a number of changes to superannuation which makes our lives a lot easier and make your finances very tax - effective.
Superannuation changes
A range of new measures are being introduced as of 1 July 2022. These changes are based around allowing you to get more money into super and leave more money in super to assist you in your retirement.
End of the work test
Currently, people between the ages of 67 and 74 can only make further contributions to super if they are employed and meet a work test. As of 1 July 2022 the work test is being abolished. This means you will be able to make non concessional contributions to super including using a 3 year bring forward arrangement if you are under the age of 75. This is still subject to the lifetime superannuation cap of $1,700,000.00.
Downsizer
The eligibility age for downsizer contributions has been lowered from age 65 to 60. This allows retirees to make a $300,000.00 contribution each from the sale proceeds of their home. These contributions do not count towards non concessional limits and can be combined with non concessional contributions to massively increase your superannuation assets.
Minimum drawdown rate
The Government has extended the temporary halving of the minimum drawdown rate until 30 June 2023. This means retirees who would normally have to take out 4% as a pension will have the option to only take 2%.
Increase in the SG rate
Employees who receive the super guarantee can expect a rise in the rate of super paid from 10% to 10.5%. This is in line with the proposed incremental increase to 12% by 2025.
If you believe you may be able to take advantage of these changes please get in touch with us today to discuss your retirement.
