The End of Financial Year (EOFY) is near. Now is a great time to get your finances in order and plan ahead. While 2021 has been a year of finding our feet again, it’s valuable to start preparing for the EOFY sooner than later, to avoid the last-minute scramble in June.
To help you make the most of available tax benefits with your super, we’ve put together 10 tips to help you prepare for the 2020/21 end of financial year.
- Do a financial health check
- Check your super balance
- Consolidate your super accounts
- Make additional contributions early
- Get the most from your salary
- Consider your eligibility for government co-contributions
- Consider spouse contributions
- Get your paperwork in order
- Understand your Christian Super investment options
- Consider seeking financial help
1. Do a financial health check
Where is your money currently going? You might find it helpful to review your living expenses and create a budget for the next financial year. Having a good understanding of where your money is going will help you make better choices about spending, saving and investing. If you need help creating a budget, the MoneySmart website has some great tips.
2. Check your super balance
It sounds simple, but checking your super balance is often overlooked because of the long-term nature of super. If you rarely check your balance, you could set a reminder to do so on a regular basis (e.g. every few months on the second day of the month). This will help you become more aware of how you’re tracking for retirement.
You can use the MoneySmart Super Calculator to further understand how much you will need in your super account to live on when you retire. Most people would benefit from making additional contributions to boost their super for retirement, and to take advantage of the associated tax benefits.
If you have questions about your Christian Super account, now is a great time to get in touch with our Member Care Team, to avoid the June rush.
3. Consolidate your super accounts
Having multiple super accounts could mean you are paying multiple fees and charges, which may reduce your overall retirement income.
4. Make additional contributions early
If you want to take advantage of the tax benefits of voluntary super contributions, you will need to make sure these contributions are received by us before 30 June. We recommend making your contribution as soon as possible to avoid any last-minute issues which may delay that contribution being counted toward this financial year.
For more information about the various types of super contributions available to you, you can find more information in the four-part series on our website: Your Super Contributions explained.
5. Get the most from your salary
One of the easiest ways to reduce your tax on your wage is to salary sacrifice into your super account. Voluntary super contributions are generally taxed in the fund at a rate of 15%, instead of your marginal tax rate plus Medicare levy which could be up to 47%. This means that, depending on your marginal tax rate, salary sacrificing could help reduce tax on your wage by up to 32%.
If you’d like to read more about how you can salary sacrifice and what it is, click here.
6. Consider your eligibility for government co-contributions
The government super co-contribution is designed to help boost the retirement savings of eligible individuals. If your income is under a certain threshold and you make an after-tax contribution to your Christian Super account, the government will also make a contribution of up to $500 each financial year.
Click here to learn more.
7. Consider spouse contributions
If you have a spouse, you can boost their super by making an after-tax contribution into their super account. If your spouse isn’t working or if their income is under a certain amount, you may be eligible for a tax offset of up to $540 per year if certain conditions are met. Click here to learn more.
8. Get your paperwork in order
While most employers now use the Government’s SingleTouch Payroll system (which sends your annual payment summary directly to the Australian Taxation Office), some employers may still provide these directly to you. We recommend that you double check with your employer (and any additional or previous employers) from the 2020/21 financial year that they have your correct email and postal addresses, to avoid any delay in getting your payment summary or summaries.
9. Understand your Christian Super investment options
It’s important that you ensure your super is invested in a way that you feel comfortable with and that makes most sense for your stage of life.
The EOFY is a good opportunity to review how your super is invested through your selected investment option. Log in to your online MemberAccess account to check which investment option you have selected. Learn more about all our investment options by reading our Investment Guide.
10. Consider seeking financial help
Christian Super has a range of tools that can help you if you want financial advice, including some free services. To read more about the financial advice offerings that we can provide you with, click here.
Our Member Care Team are here to help. Click here to contact us.
Disclaimer: The content of this article includes advice that is general in nature and does not consider your personal situation. Christian Super encourages all people considering their options in retirement planning to seek out qualified professionals who can provide specific personal advice.