6 Super Strategies to Build and Protect your Wealth

5 Super Strategies to Build and Protect your WealthAustralia has one of the highest life expectancies in the world and the average retirement length has increased accordingly. Because of this, it is extremely important that you make the most of your super and other savings in the lead up to and during your retirement.

Financial year end is an ideal time for you to spend some time looking at your super and to build a financial plan. Dedicating a bit of time to your super over the next few weeks will make a huge difference to your fund in the long-term.

Below are 6 Super strategies that can help you build and protect your wealth while making the most of all available tax benefits.

1. Get the Government co-contribution

If you earn less than $46,920 a year, the Government may add to the contributions you make from your after-tax pay. The amount paid by the Government depends on your income. For every dollar you contribute from your after-tax income, the Government will contribute 50 cents up to a maximum of $500.

The Australian Tax Office (ATO) has set out a few tests to determine whether you are eligible for the co-contribution scheme. People who wish to benefit from this scheme must satisfy all of the criteria listed by the ATO.

If you are deemed eligible, the Government will pay the co-contribution directly into your super account after you have submitted your tax return for the financial year in which you made the contribution.

2. Consider combining your Supers

According to APRA, there is an average of three super accounts per Australian of working age. With this in mind, it is important for you to ensure that you keep track of all of your super accounts so that you receive all of the benefits owing to you.

Every super account charges investment and administration fees. Administration fees are usually a flat rate fee which means that you are paying a flat-fee per super account that you have. In addition to this, certain super funds automatically deduct a life insurance premium which means that you could be paying multiple deductions per super account.

An easy step to cut costs is to combine your super fund accounts. This will also make things a lot easier to manage.

3. Get more from your salary or bonus

A salary sacrifice arrangement is an excellent way to build your super and to boost your long-term investment.

If you are an employee and you are willing to sacrifice your pre-tax salary or bonus into your super rather than receive it as cash, you can reduce the tax on your salary or bonus by up to 31.5%. Salary sacrifice contributions count towards your concessional contributions cap, as do any super contributions made for you by your employer.

4. Pay less tax on your investment earnings

If you have an investment in your own name, it could be advantageous for you to invest through your super rather than outside of your super. Money that you invest into your super from your after-tax income does not get taxed because you have essentially already paid tax on this money. The benefit of this is that you could reduce your tax on investment earnings by up to 31.5% and you will increase your retirement savings.

5. Use your super to manage Capital Gains Tax

If you make a capital gain on the sale of an asset this financial year and earn less than 10% of your income from eligible employment, you could invest the sale proceeds into your super and claim a portion of the contribution as a tax deduction. This means that you will be able to use the deduction to offset your taxable capital gain and save on tax and increase your retirement savings.

6. Check your investment options

It is important to regularly review and monitor the investment option that your superannuation savings are invested in by your super fund. If you have not chosen your super fund, it is highly likely that your super savings will be sitting in the balanced option which is the default option. Evaluating the investment options is crucial as it may turn out that you are paying very high fees for a below average return.

There are a number of factors to consider when looking at your investment options and one of our advisers would be more than happy to discuss this with you.