Superannuation strategy should not be one to “set and forget”. The new calendar year is a good time to review your circumstances, and perhaps set some new goals to help boost retirement savings.
The new calendar year is here and now is a good time to conduct a superannuation health check and set some new goals to help boost superannuation savings. There have been a few changes to superannuation which applied from 1 July 2014 and it is important to understand how they may apply to you. The following are some considerations:
- Superannuation guarantee rate – on 1 July 2014, the super guarantee rate increased to 9.5% (up from 9.25% for 2013–2014). You may want to check that your pay slips reflect this new rate.
- Contributions caps – the general concessional contributions cap is $30,000 for 2014–2015 (up from $25,000 for 2013–2014).
- Concessional cap for people aged in their 50s and 60s – a higher concessional contributions cap of $35,000 applied for 2014–2015 for people aged 59 years or over on 30 June 2013. For the 2014-15 financial year, this temporary concessional cap of $35,000 also applied for those aged 49 years or over on 30 June 2014. This temporary $35,000 concessional cap (not indexed) will cease when the general cap reaches $35,000 through indexation (expected to be 1 July 2018).
- Non-concessional contributions cap – this has increased to $180,000 (or $540,000 every three years for those under age 65) from 2014–2015 (up from $150,000 for 2013–2014, or $450,000 over a three-year period).
- Salary sacrificing super – inquire about salary sacrificing super. Or consider reviewing an existing arrangement with your employer.
- Government co-contribution – a 50% matching applies where the Government will pay a co-contribution up to a maximum of $500 for a $1,000 eligible personal contribution for individuals with total incomes up to $34,488 for 2014–2015 (phasing down for incomes up to $49,488).
- Checking super savings – check your super balance regularly. In addition to getting to know your super better, you may also want to protect your super from identity crime. For example, you may want to change passwords for accounts that can be viewed online.
- Consolidating multiple super fund accounts – consider consolidating multiple super fund accounts. This may help avoid paying multiple super fund fees, reduce paper work, and make it easier to keep track of your super. Keep all your statements in a safe place, especially if you do need to maintain multiple accounts.
- Checking insurance and investment options – review insurance and investment options to see if they still meet your needs.
The list above is not exhaustive. Obtain advice before implementing any new strategy, such as your retirement goals. Please contact our office for a complementary discussion with one of our specialists on 02 9299 1200.