Superannuation is an essential part of planning for your retirement. And while it may seem like a straightforward process, there are several strategies you can adopt to maximise your superannuation benefits. One such strategy is taking advantage of super contributions splitting.
Super contributions splitting allows a member to split their concessional contributions (CCs) to their spouse’s super account. This strategy can be especially useful for couples who want to equalise their super accounts and maximise their non-concessional contributions (NCCs).
The rules governing super contributions splitting stipulate that the receiving spouse must either be under their preservation age or have reached their preservation age but be under 65 years of age and not retired. Additionally, the super fund’s governing rules may also play a role in the implementation of this strategy.
The benefits of using super contributions splitting are numerous. Firstly, it can help to equalise the super accounts of both spouses, which may help to keep each member’s super benefits under the transfer balance cap in the long run. This way, each spouse can maximise their NCCs, and the couple can maximise the combined amount that can be transferred to the tax-free retirement pension phase.
Moreover, this strategy can be used to pay for life and total and permanent disability (TPD) insurance premiums for a low-income or non-working spouse through their super account. Additionally, super contributions splitting can improve your Centrelink position by splitting contributions to the younger spouse, and it can allow access to superannuation benefits earlier by splitting contributions to the older spouse.
It is essential to note that super contributions splitting may not be suitable for everyone, and it is always advisable to seek professional financial advice before making any significant decisions about your superannuation.
In conclusion, taking advantage of super contributions splitting is an effective strategy to maximise your super benefits and achieve your retirement goals. By equalising your super accounts and maximising your NCCs, you can ensure that you have a comfortable retirement. However, before embarking on this strategy, it is essential to understand the rules governing it and seek professional financial advice.
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