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, working less and making a greater contribution to family commitments.
Any future initiatives by Government to boost women’s superannuation will be applauded but there are already a number of simple things that couples can do every year to boost the superannuation balance of their spouse. With the ever evolving superannuation caps, it might even be a smart idea for couples to try and keep their superannuation balances relatively equal in case superannuation Legislation changes for the worse in the future?
Salary sacrifice to superannuation is a very powerful tool that can be used to boost superannuation and couple’s 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 also consider a deductible super contribution but there are limits. 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 some conditions and the maximum’s that can be split based on the previous year’s concessional superannuation contributions and caps.
Concessional superannuation contributions include 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 concessional contributions to potentially qualify for rebates and the Government co-contribution to boost your superannuation balance further.
In summary, if you are looking at your superannuation contribution options, think holistically about your situation with your spouse and/or partner. Make sure you consider if there are ways for you to tax effectively increase your superannuation contributions and don’t forget to review your asset allocation to ensure it reflects your risk profile. While you are at it, make sure you investigate opportunities to reduce your superannuation fees.
Unfortunately, superannuation is far more complicated that it needs to be so you will need to do some research and consider if you need advice. This is a really big decision so give it plenty of thought before you choose a financial adviser and it might be a smart decision to get a second opinion before you implement anything.
What should you do next? As its your superannuation that is intended for your retirement, a good place to start is for you to get involved early and take an interest.
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Disclaimer: The information in this post is of a general nature only and has been provided without taking account of your objectives, financial situation or needs. No representation is given, warranty made or responsibility taken about the accuracy, timeliness or completeness of the information. Because of this, we recommend you consider, with the assistance of a financial adviser, whether the information is appropriate in light of your particular needs and circumstances.