As the end of financial year fast approaches, there is still time to consider the strategies available to you this June 30 to build your wealth, some of which are discussed below.
There is a federal government scheme in which people who earn less than $42,016 pa and make a non-concessional contribution to superannuation (a contribution for which no tax deduction will be claimed), may be eligible to receive a government contribution to their superannuation. Under the scheme, the government will contribute up to $0.50 for each $1.00 you contribute to your super fund up to $500. This entitlement reduces for every dollar earned up to the cut-off annual income of $57,016.
For those eligible, this strategy can provide a return on every dollar contributed to super.
Concessional contributions to superannuation are those contributions made to super for which a tax deduction is being claimed. Using this strategy, most people can claim a tax deduction for contributions they make, up to the maximum limit, which is currently $27,500 p.a. However, this figure includes any Superannuation Guarantee Contributions an employer may make.
If you have a total superannuation balance of less than $500,000 on 30 June of the previous financial year, you may be entitled to make additional concessional contributions for any unused amounts.
The federal government allows a 15% Low Income Superannuation Tax Offset of up to $500 on concessional contributions made by individuals with a taxable income of less than $37,000 per year.
This strategy can assist you to bolster your retirement savings whilst managing your tax liability prior to retirement.
Income protection insurance can pay a monthly benefit of up to 75% of your salary if you are unable to work due to illness or injury, with the premiums being tax deductible. Paying premiums in advance enables you to bring forward the following financial year’s premiums to claim a tax deduction this financial year.
This strategy enables you to protect your existing and potential wealth by taking out insurance to cover you against those events which can disrupt even the best laid plans.
There are many end of financial year strategies that have tangible benefits to assist your wealth accumulation and protection objectives, so speak to your financial adviser now to discuss and implement.
The information provided in this article is general in nature only and does not constitute personal financial advice.