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You’ll acquire one of the biggest assets of your life by the time you reach your golden years if you start investing in the super much earlier on in life. Enjoying a certain lifestyle during your retirement years may require you to contribute a certain amount to your super every year. But you must remember that the amount of money that you contribute in a super won’t be accessible to you till the time you retire. You must check out your options in order to pick the right contribution strategies over others.
1. Investing Pre-tax Salary
Seek information regarding your chances of putting a bigger portion of your pre-tax salary into the super beyond the SG amount worth 9.5%. The amount of tax that you’ll need to bear is worth 15% of this amount. But you must remember that in your attempt to put more in the super, you’ll be taking a lesser amount back home by salary sacrificing.
2. Tax contributions
After-tax contributions should be made to the super quite consistently. No extra taxes are applicable on these contributions and this income is already taxed at the usual rate. If your entire super balance is lower than $1.6 million, then you’ll be entitled to make after-tax contributions. If the income of your spouse is worth $37,000 or lower, then you’ll achieve a tax exemption worth up to $540 while contributing to her super. You may achieve a tax offset partially when your spouse earns any amount lower than $40,000.
3. Tax-deductible contributions
Employees are now allowed to contribute to the super on their own and show it as a tax deduction. Earlier only self-employed individuals were allowed to make such contributions. About 15% of the amount of your contribution will only be taxed in this case. A notice of intent needs to be filled out and submitted with the super fund prior to filing your tax return.
4. Availing fund loans and other options
It’s actually very important for you to review your investment options and the super fund for at least once every year. You must check out all options while reviewing all investment options. Your retirement nest-egg gets accelerated and expanded when you opt for the super-leveraged property investment. Your investment strategy gets a boost up when you get a loan for your super fund. You may even consider checking if you have adequate insurance protection. Your premiums and fees may accumulate and affect your balance over time.
5. Consolidating the super
During our working lives, it’s quite natural for us to switch between jobs. However, the outcome is often a missing or lost super. A missing or lost super is often the outcome of such job switches. Missing or lost super can be easily tracked down if you opt for a lost super search. Increasing the retirement nest-egg could be a possibility once you accumulate them into a single super fund. You must check out existing funds and all associated withdrawal or exit fees for the same. Prior to consolidating your super, you must ensure you have adequate insurance protection.
Know the Limitations
Super contributions may be associated with certain limitations. You’ll need to gather more information about these contribution limits and their impact on your possibility to make such contributions and the amount of tax to be charged for these contributions.