According to the Australian Bureau of Statistics the average superannuation balance for males between 45 and 54 years is $196,400.1 Specialist financial advisory company The Moreton Group’s records show that its male teacher clients average $160,000 in super, while its female teacher clients of the same age average $230,900.
Cameron Dickson, Managing Director of The Moreton Group, said the end of the financial year is an ideal time to grow your retirement nest egg.
“Some Teachers can increase their tax return by making a tax deductible contribution into their super fund from their savings before the end of the financial year,” Mr Dickson said.
Women on average retire earlier than men2 but, for either men or women, making superannuation contributions could grow your nest egg and take months off your working life.
“For example, a recent 55 year old teacher with $250,000 currently in their super account had projections of a super balance of $539,964 at 65 if they make no additional contributions,” Mr Dickson said.
“The projections also illustrated If this Teacher were to contribute $1,000 in the lead up to EOFY every year until they retire at say 65, they could retire with $553,051, allowing more financial freedom in their retirement or even the opportunity to retire months earlier than they originally planned.
“The benefits of contributing to super can be realised long before retirement, because contributions are taxed differently to your normal income, with our client projected to get a tax refund of $3,866 over the 10 year period of contributions” he said.
Mr Dickson said the most valuable thing anyone can spend their tax return on is their future. “Getting personalised advice is the only way to get a clearer picture of what you will need in retirement,” he said.
“Engaging with a retirement planning advisor will allow you to build a clear and realistic roadmap so you can live life on your terms.”
How to make your EOFY ‘super’:
- Reduce your taxable income by salary-sacrificing into super: ○ Ask your employer if they offer salary sacrificing ○ Let your employer / accounts team know how much you want to contribute each pay.
- Make contributions to super before June 30 and claim them back on tax: ○ Before you make a contribution, check you are eligible ○ Ensure that the cumulative amount of your deductible contributions (including SGC) in the current financial year is no more than $27,500 ○ Make a contribution to your super fund via their website or app ○ Fill out a Notice of intent to claim or vary a deduction for personal contributions form to your super fund and receive an acknowledgement
- Get a super top-up from the Government: ○ If you are eligible, you’ll receive up to 50c for every dollar extra you contribute into your super account and don’t claim a tax deduction for, up to a maximum of $500 through the Government Co-contribution scheme ○ Contribute to your super ahead of June 30.
- Make a spousal contribution: ○ If you are eligible, you can contribute to your spouse’s super and claim a tax offset of up to $540 ○ Fill in the details about the super contributions made on behalf of your spouse in your tax return ○ Lodge your tax return.
- Invest your tax return into super: ○ Check you are eligible ○ Contribute to your super once you receive your tax-return ○ Fill out a Notice of intent to claim or vary a deduction for personal contributions form (NAT 71121) to your super fund and receive an acknowledgement ○ Make a claim on this contribution next year!