Have you considered spouse contribution splitting?
Your individual total super balance as of 30 June each year impacts your ability to implement various super strategies in the following financial year.
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This may include ability to make non-concessional contributions when your TSB is over $1.9 million, utilising carry-forward provisions for large concessional contributions when your TSB is below $500,000 or claiming tax deductions for personal contributions at ages 67–74 when your TSB is below $300,000.
The asset test for Age Pension only includes superannuation for individuals of pension age. If there's a significant age difference between spouses, directing more super to the younger spouse could potentially maximise Age Pension entitlement at retirement.
Spouse contribution splitting allows you to transfer up to 85% of your annual concessional contributions to your spouse's super account, subject to some key points:
- Eligible contributions include superannuation guarantee, salary sacrifice and tax-deductible personal contributions.
- Only contributions from the previous financial year may be split.
- You can apply to split your contributions when you are any age, but your spouse must be either:
- less than the preservation age that applies to them.
- aged between their preservation age and 65 years, and not retired.
- The split is considered a rollover and doesn't affect the receiving spouse's contribution caps.
You must also check if see if your fund offers spouse contribution splitting, as it's not mandatory for all funds. This can be an effective tool in superannuation equalisation between spouses. Consider your unique circumstances and seek professional advice to ensure this approach aligns with your long-term financial goals.
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