University of Melbourne paints bleak picture for future retirees

SFG-MC-Bucket-CONTRIBUTEA large proportion of Australians are unlikely to have sufficient income during retirement, according to a survey conducted by the University of Melbourne and Towers Watson*.

The survey indicated only 53 per cent of couples and 22 per cent of singles in the 40 to 64 age group are set to have a comfortable level of income during retirement. To help ensure you have enough money to enjoy a comfortable retirement, talk with your financial adviser to find out how you are tracking against your retirement goals.

How much can you invest in super?
Here are the superannuation contribution caps which apply for the 2014/15 financial year.

• Contributions which qualify for a tax deduction
These are known as concessional contributions and the limit is aged based, as shown below. Generally you can only qualify for a tax deduction if you are self-employed. However employees can benefit as well by making a contribution through salary sacrifice.

The limit includes any Super Guarantee your employer pays on your behalf.

Age	        Tax deductible limit (2014/15)
Up to 49	$30,000
50+	        $35,000

• Contributions which do not qualify for a tax deduction You could also invest up to $180,000 p.a. in super as a non- concessional contribution (i.e. you do not receive a tax deduction on this contribution). If you are under age 65, you can ‘bring forward’ up to two years of non-concessional contributions. This means you could contribute $540,000 in
one financial year, but you would not be allowed to make non- concessional contributions in the following two financial years.

• The Government co-contribution
Currently, eligible workers earning up to $49,488 who make personal contributions to super can take advantage of the Government co-contribution of up to $500.

• Spouse contributions
If your partner’s income is less than $13,800, you could qualify for a tax offset of up to $540 on the first $3,000 you contribute to superannuation for them from your after-tax income. This tax offset decreases as your partner’s income increases above $10,800.

Notification of intention to claim a tax deduction
To be eligible for a deduction for a personal superannuation contribution, a self-employed person must have given a notice to the fund trustee of their intention to claim a deduction. The notice must be given by the time the person lodges their income tax return or the end of the financial year following the year the contribution was made. The individual must also have received an acknowledgment from the trustee of receipt of the notice.

A notice of intent to claim or vary a deduction for personal super contributions (Nat 71121-06.2012) is available on the ATO website.

*Reported in Investor Daily 31 March 2014