Before we go any further, no we’re not offering relationship advice, just super advice!
The superannuation reforms effective from 1 July 2017 aim to limit the amount of tax concessions you can receive on your assets held within superannuation. However, as many couples have a real imbalance in their superannuation assets, this can lead to less optimal outcomes in retirement.
Spouse contribution splitting can help equalise balances between a couple to make sure they maximise the available superannuation tax concessions. The rules allow you to split up to 85% of your concessional contributions to your spouse. Concessional contributions are before tax contributions made by your employer or contributions that allow you to claim a tax deduction. Given the cap on these contributions is now $25,000 per year, this is a long-term strategy that generally needs to be implemented early to be fully effective.
But the benefits can be greater than just balance equalising. In some circumstances, it might be desirable to get earlier access to superannuation, maximise Centrelink benefits or give a couple greater ability to make large personal after tax (non-concessional) contributions. Some couples may also be entitled to a government co-contribution and tax offset.
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Keep Wealth Partners Pty Ltd (AFSL 494858). This information is of a general nature only and may not be relevant to your particular circumstances. The circumstances of each investor are different and you should seek advice from a financial planner who can consider if the strategies and products are right for you.