The 2021 end of the financial (EOFY) will be nothing like previous financial years for many Australians with potential Government stimulus payments, early release of super withdrawals, change in working hours and working from a home office all impacting financial goals and tax time preparations.
Bryan Ashenden, Head of Financial Literacy and Advocacy at BT says “Australians made 4.9 million applications to withdraw super as part of the early access to super scheme1 and this has helped them through a very challenging time when they may have had reduced income due to impacts of COVID-19. While this will create a gap in retirement savings it is never too late to start to rebuild.”
BT’s tips that may boost your super savings:
1. Consider salary sacrificing
Salary sacrifice is an arrangement made with your employer to in essence ‘give up’ part of your before-tax salary and have it paid into your super account instead. There are limits to this, which are based on your age, but it’s definitely worth checking out as it can be a tax effective way to boost your super and help you save for retirement.
2. Make an after-tax contribution
Previously, this is something many self-employed people have opted for, but it’s actually available to everybody. The advantage of this is in the way your investment earnings are taxed.
3. Voluntary contributions
If you’re saving for a home deposit, voluntary contributions to your super is a great way to do under the first home super saver scheme. There are limits and eligibility criteria and you can find out about those on the ATO website.
“Just like the end of a calendar year, the end of the financial year is a good time to consider what you want for your financial future. There are other things you should look at to make sure you are making the most of your savings for retirement,” said Mr Ashenden.
EOFY checklist for super:
4. Do you know how much super you have?
There is still $13.8 billion lost super in Australia2, you may have an old account you have forgotten about. You can go to the ATO website and use their search tool to see if you have some forgotten savings. If you don’t want to be paying fees on unnecessary accounts – ask your super fund to consolidate them for you.
5. Review your insurance
Many people have life insurance inside their super which can be beneficial as the premiums are paid from the super balance, but you need to make sure you have the right cover. Consider if your circumstances have changed and how this might impact your protection levels.
6. Review your investment options and make a choice
Do you know what your super savings are invested in? And how much risk you are willing to take? These days super funds have information online on what’s available and tools to help you understand your own risk ‘appetite’. Taking an interest in your super and choosing how your money is invested is an important step in managing your finances. You can also consider seeking professional financial advice.
7. More EOFY tax tips
It’s not just super that looks different this year, many Australians have continued to work from home throughout 2020/21 and the ATO’s simplified tax deduction for working from home expenses has been extended for the whole year – calculated at 80c per hour. You need to provide a log of the hours you worked from home, so remember to include in your tax return to boost a potential refund.
1 APRA Covid-19 Superannuation Early Release Scheme statistics issue 36, 8 February 2021 – 3.5million initial and 1.4 repeat applications received (since the inception of the scheme to 31 January 2021)
2 ATO Lost and unclaimed super, as at 30 June 2020
Media Relations, BT
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