The footy season is well and truly with us and the weather in Melbourne has a definite Autumn feel.  As we move into April thoughts also turn to the end of financial year and items to check off before the financial year ends. Key issues to think about this are:

Concessional Contributions to super

If you are looking to maximise your retirement savings, then make sure you get the maximum concessional contribution into super.  This year, the limit is $27,500 per person which includes your employer superannuation guarantee, salary sacrifice and personal contributions for which you are claiming a tax deduction.

Concessional contributions over this limit will be included in your personal income and taxed at your marginal tax rate.

Catch-up concessional contributions

If your superannuation balance on 30 June last year was less than $500,000 and you have not maximised your concessional contributions since the 2019/20 financial year, then you might be able to make an extra concessional contribution this year and ‘catch up’ your contributions.

This is a particularly attractive strategy for those who have sold an asset this financial year and have a capital gain from that transaction.  Putting some extra funds into superannuation and claiming a personal tax deduction can offset some or all the capital gain, saving tax while at the same time boosting your retirement savings.

A quick look at your myGov superannuation information should indicate the amount you have available for your catch-up concessional contributions.

Non-Concessional contributions

Those aged up to 67 years of age can put up to $110,000 of personal funds into superannuation each year or can contribute up to $330,000 by bringing forward two future years’ contributions into this year.  This can be a great way to boost your tax effective savings for retirement.

Keep in mind that from 1 July this year, you will be able to make non-concessional contributions to superannuation if you are under 75 years of age without having to work.  You can also use the bring-forward rule up to that age.  Given this change, you might need to review your contribution strategy to optimise the amount you get into super.

Managing your tax position

If you have sold assets this financial year for a profit, then you might be looking at a higher tax bill come the end of the financial year.  One strategy you could consider is to offload assets now that are currently below the price you paid for them.  This can give you a capital loss to offset against your capital gain, thereby reducing your future tax bill.

More importantly, you can re-balance your portfolio and ensure your assets are well positioned to meet your goals into the future.

Superannuation pensions

For those in receipt of an account-based pension from superannuation, it is important that you draw at least the minimum pension from your fund prior to 30 June.  The federal government has halved the minimum required draw down for this financial year and the next.  The table below provides a summary of the minimum draw down rates:

* The relevant age and account balance are the age and account balance at 1 July of the current year for existing pensions, and the balance on the start date for pensions commencing during the current year.

For our clients, we are already looking at your portfolios and strategies to ensure your position is optimised prior to the end of the financial year.  If you are interested in what strategies you should be considering for your own financial situation prior to 30 June please give one of our advisers a call on 03 8548 4800 or make contact via our website.

Please note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.