Team ef­fort will boost your su­per

Cou­ples should top up nest eggs to­gether, writes An­thony Keane

The Western Star - - Money Saver -

SU­PER­AN­NU­A­TION should be seen as a team sport for cou­ples aged 40 and over.

Re­cent rule changes have made it more im­por­tant for peo­ple to take a joint ap­proach to su­per to save tax, boost fu­ture wealth or get a larger age pen­sion.

“Think­ing about it ear­lier rather than later is a good idea,” said Bruce Bram­mall Fi­nan­cial man­ag­ing di­rec­tor Bruce Bram­mall.

“It’s prob­a­bly not some­thing you do in your 20s,” he said. “Maybe cou­ples in their 30s.

“But cer­tainly from your 40s on­wards you should start think­ing about it.”

Here’s some su­per food for thought for cou­ples.

TAX DE­DUC­TIONS

Peo­ple can now get tax de­duc­tions for mak­ing per­sonal con­tri­bu­tions to su­per up to their an­nual con­ces­sional con­tri­bu­tion cap of $25,000.

If do­ing this, it makes sense to con­trib­ute to the fund of the part­ner on the high­est mar­ginal same strat­egy ap­plies for salary sac­ri­fice.

And don’t worry if one part­ner’s su­per grows faster . If there’s a break-up it gets split, like any other as­set.

“Courts see su­per­an­nu­a­tion as just an­other fi­nan­cial as­set in a re­la­tion­ship,” Mr Bram­mall said. “It will be­come part of the pot that needs to be split should a re­la­tion­ship fail.”

SPOUSE CON­TRI­BU­TIONS

If your part­ner earns less than $40,000 a year, you can put money into their su­per and get a handy bonus at tax time thanks to a gov­ern­ment re­bate.

“It’s not enor­mous but if you have a low in­come-earn­ing spouse and put in $3000, you can get up to $540 back, which is a re­turn of 18 per cent,” Mr Bram­mall said.

“It should be used more than it is.”

Golds­bor­ough Fi­nan­cial Ser­vices di­rec­tor Brenton Miegel said us­ing the spouse con­tri­bu­tion worked well when one part­ner worked part time.

EX­TRA PEN­SION

Team­work among older cou­ples can de­liver a big pen­sion boost where one part­ner is older than the other.

“Money in su­per­an­nu­a­tion is ex­empt from Cen­tre­link means test­ing un­til age pen­sion age,” Mr Miegel said.

That means a re­tir­ing per­son could with­draw their own su­per and pump it into their younger part­ner’s su­per, low­er­ing their own as­sess­able as­sets to po­ten­tially pocket ex­tra pen­sion.

“But just watch the preser­va­tion rules,” said Mr Miegel. A per­son could end up lock­ing their money away for years by putting in a younger part­ner’s su­per.

GOT A LAZY $1.6 MIL­LION?

The for­tu­nate few who have huge su­per bal­ances may need to share su­per among their funds to en­sure both have ac­cess to the $1.6 mil­lion per per­son trans­fer bal­ance caps for tax-free pen­sion.

Those with smaller nest eggs may still want to even out their su­per bal­ances to remain un­der other caps, such as the $500,000 limit for mak­ing catch-up con­tri­bu­tions. Mr Miegel said “it’s not a case of one size fits all” when su­per plan­ning for cou­ples.

“It’s their bucket of money and they need to un­der­stand to­gether what they’re try­ing to achieve,” he said.

BONUS: Golds­bor­ough Fi­nan­cial Ser­vices di­rec­tor Brenton Miegel.

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