Fresh opportunities to supercharge your super

A FRESH bunch of superannuation rule changes came into force on Saturday, July 1, opening some new opportunities for Australians to build bigger nest eggs.

While the new rules lowered the cap on tax-deductible contributions to $25,000 a year and introduced more restrictions for wealthy savers, existing incentives remain.

Here are five ways to supercharge your super fund in the new financial year. EXTRA CONTRIBUTIONS Adding extra money as soon as you can gives your super fuel to grow over many years.

Salary-sacrificing pre-tax income into super has remained popular and the new rules allow any worker to make contributions at any time and claim a tax deduction.

Financial planners say people should make extra pretax contributions early in the financial year and early in life because the $25,000 annual limit – down from $35,000 – prevents over-50s from growing super as quickly as they previously could.

“Once you start doing it, you don’t miss it,” Wealth on Track principal Steve Greatrex said. “Now that the caps are lower, it’s going to be harder to catch up.”

CO-CONTRIBUTIONS

If you can spare $1000 and earn below $51,813 – or would like to help out a family member earning below that amount – you can make an after-tax deposit into superannuation and the government will add up to $500.

That’s a handy 50 per cent return on your money.

“Why wouldn’t you?” JBS Financial Strategists CEO Jenny Brown said.

CHECK YOUR INVESTMENT MIX

“Keep an eye on where your super is invested,” Ms Brown said. “Make sure it’s not sitting in cash (earning 2 per cent) if there are other options available.”

People with years before retirement can afford to go for growth, but Ms Brown said they should not take unnecessary risks with speculative investments.

“If you are 25, you have got a long while before you can access your super. Make sure you have quality assets and review it on a regular basis.”

SPOUSE CONTRIBUTIONS People who pay money into the super fund of a low-income spouse can get $540 back from the government through a tax rebate. The threshold for the spouse’s income jumped from $13,800 to $40,000 on July 1, enabling many more couples to benefit.

BUYING AND SELLING HOMES

Two housing-focused super incentives have begun, one that lets first home savers make taxdeductible contributions to a super-linked account for a home deposit, and another letting over-65s downsize their home and pump up to $300,000 into super on top of existing caps.

Mr Greatrex said these incentives could deliver “huge” benefits to some people.