Have you checked your superannuation investment settings recently? This article explains why you should do so, and how your personal financial circumstances should affect your choices.

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It can be tempting to treat superannuation as a ‘set and forget’ investment. In most years, your annual statement will show what appears to be a satisfactory growth rate, so why tamper with something that seems to be working reasonably well? However, depending on your age and goals, your superannuation fund account could have a more suitable mix of investments.

Put simply, you need an appropriate blend – for your particular circumstances – of growth potential and defensive security.

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Downsizing your home and contributing the proceeds to super may be a tax-effective option to boost your retirement income. But before you make the decision to sell, make sure you are aware of both the benefits and the possible drawbacks.

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The idea of downsizing can be very appealing to empty-nesters. There will be less cleaning, gardening and maintenance, more time for hobbies and travel, and the icing on the cake comes if you can use the cash surplus you created to give your super a significant tax-effective boost.

But is the picture totally rosy, or are there some drawbacks to downsizing?

Advantages of putting downsizer contributions into super

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This article explains the ‘downsizer contribution to super scheme’ which came into effect 1 July 2018. It covers the main rules of the scheme and the potential effects on super and the age pension.{tab Introduction}

Thinking of selling your home? Since 1 July 2018 you may be eligible to contribute up to $300,000 ($600,000 for a couple) from the proceeds of the sale of your home to your superannuation fund. 

This incentive, known as the ‘downsizer contribution’, is part of a federal government program to improve housing affordability. It offers a further opportunity for some home sellers to benefit from the tax advantages associated with superannuation. On the downside it may adversely affect eligibility for age pension.{snippet alias="article-message"}{/tabs}

The end of the financial year is rapidly approaching and, along with it, the opportunity to claim a tax deduction on additional superannuation contributions.The end of the financial year is rapidly approaching and, along with it, the opportunity to claim a tax deduction on additional superannuation contributions.

Why contribute more to super?

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This article discusses the differences between making pre-tax (salary sacrifice) and post-tax (tax deductible) contributions to super. It uses a case study to explain the potential differences.

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If you are an employee, there are two ways in which you can optimise the tax-effectiveness of your additional super contributions:

•    opt for a salary sacrifice arrangement, whereby your employer makes additional superannuation contributions beyond the compulsory superannuation guarantee (SG) amount from your pre-tax earnings and reduces your salary accordingly; or
•    make a personal contribution and claim a tax deduction when you submit your tax return.

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{tab Introduction} If you are earning more than you need to live comfortably, salary sacrificing may be an attractive option to reduce your tax, boost your superannuation and prepare for a more comfortable retirement later on.

Salary sacrificing simply involves having part of your salary paid into a superannuation fund by your employer rather than receiving it as income. These contributions are not included as part of your assessable income, reducing your income tax burden.

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