It is a well known fact that women often accumulate less superannuation than men over their working life due to many reasons including lower salaries and working less hours due to family commitments.
Any future initiatives by Government to boost women’s superannuation will be applauded but there are a few simple things that couples can already do every year to boost the superannuation balance of their spouse.
Salary sacrifice to superannuation is a very powerful tool that can be used to boost superannuation and a couple can determine who is best placed to initially implement this strategy. A change in Legislation last year introduced an opportunity for anyone who is eligible to contribute to superannuation to consider a deductible super contribution. This might initially benefit the higher income earner in the relationship but wait: there’s more!
After making salary sacrifice or deductible superannuation contributions, Superannuation Legislation allows members to consider splitting concessional superannuation contributions with their spouse in the following financial year. There are a few conditions and the maximum that can be split is 85% of the previous year’s concessional superannuation contributions up to the cap.
Concessional superannuation contributions are superannuation guarantee, salary sacrifice and deductible contributions.
If you or your spouse are concerned about your superannuation balance, have a think about whether it makes sense to contribute and split concessional superannuation contributions each year to boost and equalise superannuation balances. Additionally, for low income earners, look into and consider other contribution options such as spouse contributions, and personal non contributions to potentially qualify for the Government co-contribution to boost your superannuation balance further.
In summary, if you are looking at your superannuation contribution options, think holistically and make sure you consider if there are ways for you to tax effectively increase your current contributions and don’t forget to see if you can reduce your superannuation fees.
Unfortunately, superannuation is far more complicated that it needs to be so you will need to consider if you need advice. This is a really big decision so give it plenty of thought before you choose a financial adviser.
What should you do next? As its your super for your retirement, a good place to start is for you to get involved and take an interest.
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Disclaimer: Do not trust what you read on the web. Always seek professional advice before making investment decisions.