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Maximising Your Super Should Be Done 10 Years Before Retirement For Best Results…

There are plenty of ways to maximise your superannuation contributions prior to your retirement at any time of your life. As the means of funding your nomadic lifestyle, your seachange or your downtime after retiring, you want to make sure your superannuation is equipped to handle it.

The Australian Taxation Office recommends that you should check how you can maximise your super at the bare minimum of 10-15 years before the age that you hope to retire so that you have the time you need to make a difference to your final super balance.

So, if you were thinking of retiring at your preservation age (which is the age that you can access your super), your superannuation should reflect the amount that you want to be able to access to fund that retirement.

While starting earlier does mean it may be easier to accumulate what you need to retire by the time of it occurring, it doesn’t mean that there’s a cutoff date or a deadline to have contributions in for maximised profits.

Here are 3 simple ways that you can make a difference to your superannuation fund which could impact your balance for retirement in the long-term(and the sooner you try them, the better).

Salary-Sacrificing

Your employer is required by superannuation law to contribute 10% of your taxable income to your super each year. This allows you to build up a steady balance as you work without having to actively contribute yourself.

However, if you have a position that pays well enough and allows you to do so, you may also be able to speak with your employer about arranging for some of your income to be ‘sacrificed’ to your superannuation, and contribute additionally to the balance yourself. These are known as concessional contributions.

So, for example, your employer may pay you $1,500 as your base salary pay. They also make the 10% contribution for your superannuation and pay $100 in tax. That leaves you with $1350. If you elect to salary-sacrifice, you might wish to pay $100 from your before-tax income. This means that instead of being taxed at a $1,500 base salary, you’ll only be taxed from the $1,400.

Track Down & Combine Your Accounts

There have been measures enacted to prevent additional super funds from being created for new employees who don’t elect to nominate a super fund – for those who may have existing multiple super accounts, it’s time to consolidate and combine them.

You can increase the rate that your super grows each year as a result of the compounding effect of additional funds and fewer fees, and ensure that your nest egg is nurtured by a provider that aims to grow. You just need to be sure to check that you don’t lose out on any benefits by transferring or consolidating to your chosen fund.

Tax & Super Can Work Great Together, If You Know How

If you are willing and ready to start saving, your superannuation can become a tax deduction gold mine (if you are eligible for the deductions that you are applying for.

One such deduction is the spousal contribution deduction.

If you make a contribution to your spouse’s super (and they earn less than $37,000 per year) any contributions that you make to their super can provide you with a tax rebate of up to $540. You can also claim back on any contributions that you may have made directly from your bank account to your super until you reach the contributions limit (known as a cap).

Discussing with a specialist or your super provider about the best course of action for you and your needs may be the step that you need to take to ensure the potential growth of your fund.

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How You Structure Your SMSF Could Impact The Trustees In The Fund

May 16, 2022

The way in which a self-managed super fund is structured could change its legal compliance requirements. If you are in the process of setting up an SMSF, you will need to make a decision about how to structure it appropriately to suit. 

An SMSF can be structured as a single-member fund or a multiple-member fund, with the trustees of those funds deemed as either to be individual trustees or a corporate trustee

Examining the circumstances of your members could help to narrow down the structure that will be best suited. You can also work out from the requirements of each structure whether or not a fund structure would be suitable for the needs of your members. 

Individual Trustees

Individual trustees in a single-member fund will have two trustees within the fund. One trustee must be the fund member, but cannot be the other trustee’s employee (unless they are also relatives). An example of a single member trust fund structure could be a family super fund, where the members are trustees for the fund.

Individual trustees in a multiple-member fund structure generally have between two to six members. Each fund member must be a trustee and each trustee must be a fund member. Like the single-member fund, members of this fund structure cannot be the employee of another member (unless they are relatives). 

SMSFs that use individual trustees or are looking to use individual trustees in their structure may benefit from the following: 

Corporate Trustees

SMSFs that are set up using corporate trustees, typically set up a business or company to act as a trustee. The members within these kinds of funds are known as directors and will need to apply for a director identification number as such.

Corporate trustees within a single-member fund structure may have one or two directors, but one of those directors must be the fund member. If there are two directors, the member cannot be the other director’s employer (unless they are relatives).

Corporate trustees within a multiple-member fund structure generally number between two to six members, with each fund member also being a director. A member cannot be the employee of another member (unless they are relatives). An example of a corporate trustee SMSF could be a business acting as the trustee for a super fund, where the members are also directors of the fund. 

SMSFs that use corporate trustees or are looking to use corporate trustees in their structure may benefit from the following: 

The setup of an SMSF can be a complicated process. You may benefit from speaking with a professional assisting you in its preparation and establishment. Choose someone who is qualified, registered and licensed, and right for you and your circumstances.