Super Concessional Contributions

The ASX200 (Australia’s 200 largest companies) shed 33%* of their value from their 12 month-high of 7,192 where it stands at 5,403 today.

The silver lining is represented in the form of a buying opportunity. After all, prices are lower and it is generally better to invest at a lower cost price as long as your circumstances permit it.

Concessional contributions are:

  1. Superannuation Guarantee,
  2. Salary sacrifice,
  3. Other contributions made by your employer, and
  4. Personal tax-deductible contribution

The general concessional contributions cap is at $25,000. Where 2019-20 is the first year where you can carry forward any unused caps from the previous year.

Division 293 Tax of 15% applies super contributions for individuals whose combined income exceed $250,000.

Pension Minimum Drawdown Rates Halved

For our pensioners, the major drop in valuations in financial markets as a result of the COVID-19 pandemic are having a negative effect on the account balance of their retirement funds.

The Government has reduced the minimum annual drawdown rates by 50% in the 2019–20 and the 2020–21 financial years. This means retirees are not forced to sell their assets in a depressed market to fund pension drawdowns at their normal rates.

Working out your Super/Pension Strategy

Accumulators

  1. Work out how much of the $25,000 cap you’ve used up last year and this year;
  2. Consider your overall financial position to see if you should contribute more into Super;
  3. If so, work out what’s your Personal Deductible Contributions (Download Our Article Link);
  4. Facilitate any tax deductions with your accountant arising from your contribution strategy; and
  5. Invest these contributions diligently in line with your Risk Profile.

Retirees

  1. Work out your lifestyle requirements and its cash flow needs;
  2. Be mindful of lump-sum amounts during the next 12 months;
  3. Consider your overall financial position and any supplementary income that may be available; and
  4. Assess your risk profile and invest your retirement savings diligently.


Email us directly if you’d like some insights and help on working out your super and pension strategy for end of financial year 30 June 2020.