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How Can I Maximise My Super To Its Fullest Potential?

Retirement might seem like a far-off prospect for some people but working out how you are going to maximise your nest egg can start at any time. The sooner you start, the better the potential.

Here are just some of the ways in which you can maximise your or your partner’s superannuation potential.

Split Your Concessional Contributions With Your Spouse

You can split up to 85% of your concessional contributions from a prior year with your spouse as long as they’re under their preservation age, or under 65. This may be a strategy where your spouse has a low super balance (must be less than $500,000 before the start of the financial year) or is closer to retirement.

Contribution splitting can only be done after the end of a financial year.

Make A Spouse Super Contribution

You may be entitled to an income tax offset of up to $540 for superannuation contributions for the benefit of a lower income (under $40,000) or non-working spouse who is under age 75.

Make A Super Contribution To Save For Your First Home

Under the First Home Super Saver Scheme, voluntary contributions to your super fund may be withdrawn to help buy or build your first home. Under the scheme, you can withdraw up to $15,000 of eligible contributions made over a financial year or up to $50,000 in total for all years, plus an amount that represents deemed earnings. Non-concessional contributions can be withdrawn tax-free. Concessional contributions and total earnings will be taxed at marginal tax rates with a tax offset of 30%.

Make A “Downsizer” Contribution

If you are over age 60 and have sold your home, you may be eligible to make a once-off contribution of up to $300,000 (or $600,000 per couple).

For those eligible, there is no need to meet a contributions work test and the contribution is not subject to the prohibition on making additional non-concessional contributions where your total super balance is more than $1.7 million.

Check Your Salary Sacrifice Agreement

If you do not have an agreement in place, then consider establishing a salary-sacrificing agreement with your employer for the 2022-23 financial year. From 1 July 2022, your salary sacrifice agreement will need to take into account that the super guarantee rate will increase from 10% to 10.5%.

If you’re someone who often finds it difficult to make large lump sum payments for goods or services, you may want to consider looking into “Buy Now Pay Later” services.

Buy now pay later essentially means that, rather than paying in a full lump sum payment for a product or services rendered, there may be an option to pay through instalments of a certain amount over a set period to make the sum of the full amount in total. This method should allow you to pay in full for the product or service without overly straining your finances – you pay back what you can, as agreed upon when you begin the buy now pay later service.

Some popular buy now pay later services include Afterpay, Zip Pay, Brightepay, and some credit card networks such as  Mastercard and Visa, can offer buy now pay later arrangements.

Though it can be a convenient, immediate solution, it may be challenging to juggle the necessary repayments with other financial commitments. It’s not always the most appropriate method for people, and you should bear in mind your situation and ability in paying back the amounts. 

Before you sign up, keep in mind: 

  • It becomes easier to overspend with buy now pay later services, so know your limits on what you can and can’t afford.
  • You will be charged fees and costs to use the service, which can add up to a princely sum in and of itself.
  • Keeping track of your payments can be tricky if you’ve signed up for multiple services.
  • It could affect your loan applications for a car or mortgage as lenders consider buy now pay later spending just as much as your credit score.
  • Late repayments can appear on your credit report, which affects your ability to borrow money in the future.
  • Layby can be a cheaper alternative to buy now pay later, with no account-keeping or late fees to consider

If you are someone who could make use of BNPL services, you may wish to:

  • Ensure that when using the BNPL service, you stick to a set limit on what you spend so that you can comfortably pay it back later. 
  • Aim only to have one BNPL account at a time to manage payments through, rather than confuse yourself with multiple payments across different providers.
  • Always budget for bills, loan payments and BNPL payments, and 
  • Rather than use your credit card for payments to your BNPL account, consider linking to your debit account instead.

If you would like assistance in planning your financial future, help in managing your budget or some friendly advice, see us for a chat about what we can do for you.

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John Briggs

Jane Noller has been my accountant for the last 15 plus years. I can testify to Jane’s professionalism and expeditious manner in dealing with the day to day issues that surrounds our business accounting.

John Briggs

Registered Building Certifier

David and Alison Parker

I have been consulting J L Noller and Co. (more specifically Jane) for six years and during this time I have found her to be professional, efficient and easy to discuss all accounting and taxation matters with. Her office team are all polite and friendly also.

David and Alison Parker

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Carl Gillmore

I have used Jane & the team for the last 6 years for all of my business & personal accounting needs. They have always been professional, easy to talk to & available when we have needed assistance.

Carl Gillmore

Carl Gillmore Landscape

John Briggs

Jane Noller has been my accountant for the last 15 plus years. I can testify to Jane’s professionalism and expeditious manner in dealing with the day to day issues that surrounds our business accounting.

John Briggs

Registered Building Certifier