With the end of financial year just around the corner, there are many ways you can increase your retirement savings by implementing tax-effective super strategies.

How you can benefit

The end of financial year is a great time to think about how you can boost your super savings before 30 June, and get your financial affairs in order.

There are many strategies you can implement before the end of financial year to boost your retirement savings and achieve tax savings, such as taking advantage of the government co-contribution scheme, or benefiting from spouse contributions and salary sacrificing.

Pay less tax via salary sacrifice

Salary sacrifice means putting part of your pre-tax income into your super and potentially paying less tax because concessional contributions are taxed at 15% (within certain limits). This is compared to investing your after-tax money into super which may have been taxed at a marginal tax rate of up to 46.5%.

Whether salary sacrifice is right for you will depend on your personal circumstances and level of income.

Claim a tax deduction on your super contributions

By making personal contributions to super, you may be able to claim a tax deduction to reduce your assessable income. The contribution claimed as a tax deduction is taxed at 15% instead of your marginal tax rate.

To take advantage of this strategy, you must generally earn less than 10% of your assessable income (plus reportable fringe benefits and reportable employer super contributions) from an employer.

This strategy is ideal for people running a business as a sole proprietor or in partnership, as well as some retired or unemployed people.

Take advantage of government concessions

Many people can take advantage of the government concessions available to increase their super savings, such as the Federal Government co-contribution scheme.

If you are a low to middle income earner and eligible for the co-contribution scheme, the Government currently contributes up to $1 for each $1 of personal after-tax contributions you make to your super. This could mean up to an extra $1,000 in your super account – a significant amount.

Boost your spouse’s super savings

If you have a low income earning spouse, you can help to top up their retirement savings by contributing to their super and reduce your income tax at the same time. You receive a tax offset of up to $540 if you contribute to their super.

You could also split your employer super contributions or personal deductible contributions with your spouse. This strategy may reduce your tax liability, and if you contribute more into the older spouse’s super, it may mean accessing tax-free benefits sooner.

Protect your family

Under-insurance is a major issue in Australia and this can be frightening for you or your family if you were to get very sick, pass away or become disabled.

You may get adequate life insurance cover and pay less for premiums by purchasing insurance through your super. This involves holding life insurance in your super account and using your contributions or account balance to pay for the premiums, rather than paying for the premiums from your after-tax money.

The tax savings are one of the biggest advantages of this strategy, plus your premium is likely to be cheaper because the super fund is buying the insurance ‘in bulk’. This strategy may not be for everyone so it is important that you consult a financial adviser before purchasing insurance through super.

Act now so you don’t miss out

As you can see, there are many super strategies you can put into place to boost your retirement savings and achieve tax benefits before 30 June and thereafter. And even though there is a special focus on utilising these opportunities before 30 June, these strategies can actually be used all year round to grow your retirement savings.


For more information on these super strategies and end of financial year planning, contact Tudor Investassure on 02 9417 6011 and ask for Michael or Naomi.