Salary sacrificing involves a request by you to your employer to make a super contribution from your pre-tax salary.
Whatever your age or stage of work, making salary sacrifice contributions can be a tax-effective way to top up your super and it could also reduce the income tax you pay.
Investment earnings in super are taxed at a maximum of 15%. If you invest outside super, the earnings would be taxed at your personal income tax rate (up to a maximum of 46.5%). This tax reduction means you have a larger amount to invest, which can make a big difference over time. Although you pay contributions tax on the money going into the super fund, a lower gross salary could mean you pay less income tax.
We can help you structure a salary package with your employer and incorporate salary sacrifice into your superannuation and retirement planning strategy.
When you get closer to retirement, you could take advantage of a transition to retirement strategy, which makes it possible to access some of your super in the form of a pre-retirement pension while you are still working. If you have reached your ‘preservation age’ (which varies, starting at age 55 if you were born before 1 July 1960) and are still working, we can show you how you could salary sacrifice into your super while simultaneously drawing a pre-retirement pension. This tax-effective strategy could help increase your retirement savings.
To find out how a salary sacrifice strategy could work for you, call 1300 886 181 or email us.
Retrenchment and redundancy
If you are retrenched, you’ll have a lot of issues to consider. For some, retrenchment can lead to an exciting new beginning. For others, it can be a source of emotional turmoil with the potential to cloud good judgement. Whatever your situation, it’s important to get sound financial advice on your entitlements and how you can make the most of the money you receive.
If your employment termination payment has a number of different components, we can explain what each component is, estimate its tax liability, and explain the implications of the various options available to you.
We’ll talk to you about your plans and whether you expect to continue working full time or part time, or retire early. If you’re unsure how best to use your lump sum payment, we’ll consider your financial situation and show you different options. For example, we might look at whether it is better to reduce your mortgage or contribute to your super.
If you decide to invest all or some of the money, we can recommend investments based on your particular needs, situation and risk profile.
To find out how we can help you make the most of your redundancy payment, call 1300 886 181 or email us.
Centrelink and social security
When planning for your financial future, it is important to find out if you qualify for any of the government benefits available to individuals and families. These include (but are not limited to) the Age Pension, Mature Age Allowance, Family Tax Benefit, Parenting Payment and Disability Support Pension. There is also a range of benefits for service veterans.
As well as the Age Pension, retirees may be eligible for benefits including the Health Care Card, Commonwealth Seniors Health Care Card, Pensioner Concession Card and the Pharmaceutical Allowance. Eligibility criteria apply to each benefit. These criteria can be quite complex and can change over time.
The Age Pension can form the cornerstone of some people’s retirement income. We can help you structure your investments and assets to maximise your chances of qualifying for a pension. We’ll review your situation and look at your assets, including property, investments and superannuation savings, and assess how these could affect your social security entitlements.
To find out how we can help you maximise your social security entitlements, call or email us.