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I may retire in ten years or so

Pay less tax now, have more super for your retirement

Everyone wants to retire comfortably and enjoy the good life after years of hard work. And super is one of the best ways of achieving this. What’s more, by investing in super now, you can pay less tax on your income, obtain more affordable insurance cover, and build up your retirement savings.

Here is one of a number of strategies that show how you can make the most of your super and tax position this financial year and beyond¹.

Invest personal assets in super

If you hold an investment in your own name, you may want to cash it out and make a personal after-tax super contribution²). Why? Because investment earnings in super are taxed at a maximum rate of 15% (not your marginal rate of up to 46.5%³) and no tax is payable on super benefits received at age 60 or over.

This strategy can be particularly powerful if your money is invested in a term deposit or other asset where you don’t have to pay capital gains tax (CGT) on withdrawal. But even if you have to pay CGT when selling assets like shares, investment properties and unit trusts, the benefits of getting the money into super could more than compensate for your CGT liability.

To find out more about this strategy and the capital gains tax implications, speak to a financial adviser who can help you make the right choices for your personal circumstances. Or order one or more copies of "Pay less tax now, have more money later" to get the complete picture.

1. You should seek the advice of a financial adviser and/or taxation professional before acting on this strategy.
2. Personal after-tax super contributions and certain other amounts will count towards a non-concessional contribution cap. From 1 July 2007, this cap is $150,000 a year (or $450,000 in one year if you’re under age 65 in that year and don’t make further contributions in the following two years).
3. Includes a Medicare levy of 1.5%.

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I have dependant children

Pay less tax now, have more invested for later

When you have a family, raising children and providing for them takes all your time and energy. Between school fees, home loan repayments and maintaining your career, there’s a lot going on. And this can make retirement seem a long way off. But by taking action now, even in the smallest of ways, you can set yourself up to live well when you stop working, giving yourself the ability to enjoy the finer things in life.

Here is one of a number of strategies that show how you can make the most of your super and tax position this financial year and beyond¹.

Salary sacrifice to boost savings and save tax

If you are an employee, you could contribute part of your salary to super before the tax is taken out. This is called salary sacrifice² and it could be ideal when you get a pay rise or bonus. The beauty of this strategy is that your super contribution is taxed at a maximum rate of 15%, while the tax you pay on your salary could be up to 46.5%³. So depending on how much you earn, salary sacrifice could reduce the tax you pay on your salary or bonus by up to 31.5%.

To find out more about salary sacrifice and other super strategies, speak to a financial adviser who can help you make the right choices for your personal circumstances. Or order one or more copies of "Pay less tax now, have more money later" to get the complete picture.

1. You should seek the advice of a financial adviser and/or taxation professional before acting on this strategy.
2. Personal deductible super contributions, employer contributions (including salary sacrifice) and certain other amounts will count towards a concessional contribution cap. From 1 July 2007, this cap is $50,000 pa or, if you’re aged 50 or over, $100,000 pa for five years until 30 June 2012.
3. Includes a Medicare levy of 1.5%.

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I own my own business

Pay less tax now, have more invested for later

You want to make money and have a good lifestyle. This means putting as much as you can into your growing business so it can look after you down the track. But you don’t just want to rely on your business. It’s important to build a diversified investment portfolio that will provide for your future. Super can play an important part in this. It’s an attractive place to invest because earnings in a super fund are taxed at a maximum rate of 15%, and no tax is payable on super benefits received at age 60 or over. What’s more, by investing in super, you can enjoy up-front benefits of less tax on your income and more affordable insurance cover.

Here is one of a number of strategies that show how you can make the most of your super and tax position this financial year and beyond¹.

Establish a Buy Sell agreement tax-effectively

If you are in business with other people, you should consider establishing a Buy Sell agreement as part of your broader succession planning. This can help ensure that the business ownership is transferred in an orderly manner if any of the owners dies or is permanently disabled or is unable to work.

Also, if you fund the Buy Sell agreement by taking out Life and Total and Permanent Disability insurances through a super fund, the after-tax premium costs can be lower² than insuring outside super when you take into account the up-front tax concessions available.

To find out more about Buy Sell agreements and other strategies for business owners, speak to a financial adviser who can help you make the right choices for your personal circumstances. Or order one or more copies of "Pay less tax now, have more money later" to get the complete picture.

1. You should seek the advice of a financial adviser and/or taxation professional before acting on this strategy.
2. Lump sum tax may be payable when a death benefit is received by a non-dependant (eg an adult child) or a fund member receives a Total and Permanent Disability benefit. To make a provision for lump sum tax, you could increase the sum insured. While this will generally increase the premiums, the after-tax cost may still be lower than insuring outside super, when you take into account the up-front tax concessions available.

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I am busy building my career

Pay less tax now, have more invested for later

You are building your career and starting to make some money. There are many things you want to do with your life. You know that one day you’ll have greater financial commitments, so you want to make the most of the freedom you have now. Super is one of the best ways to save for the future and build your wealth because of the tax advantages it offers.

Here is one of a number of strategies that show how you can make the most of your super and tax position this financial year and beyond¹.

Salary sacrifice to boost savings and save tax

If you are an employee, you could contribute part of your salary into super before tax is taken out. This is called salary sacrifice² and it could be ideal when you get a pay rise or bonus. The beauty of this strategy is that your super contribution is taxed at a maximum rate of 15% while the tax you pay on your salary could be up to 46.5%³. So depending on how much you earn, salary sacrifice could reduce the tax you pay on your salary or bonus by up to 31.5%.

To find out more about salary sacrifice and other super strategies, speak to a financial adviser who can help you make the right choices for your personal circumstances. Or order one or more copies of "Pay less tax now, have more money later" to get the complete picture.

1. You should seek the advice of a financial adviser and/or taxation professional before acting on this strategy.
2. Personal deductible super contributions, employer contributions (including salary sacrifice) and certain other amounts will count towards a concessional contribution cap. From 1 July 2007, this cap is $50,000 pa or, if you’re aged 50 or over, $100,000 pa for five years until 30 June 2012.
3. Includes a Medicare levy of 1.5%.