14 October How To Replenish Post Withdrawal From Super October 14, 2020By ICI Administrator Aspire 0 By Fran Hughes is a Certified Financial Planner and Head of Financial Solutions at Nexia Perth www.nexia.com.au For many working Australians effected by the economic fallout of COVID-19, the government’s early release of super scheme has been a lifesaver, with the money accessed from retirement savings helping provide additional support at a time of financial uncertainty. How do you replenish? My top 5 ways to rebuild your superannuation balance without breaking the bank. Early estimates by Treasury indicated that 1.6 million Australians would access their super early, however current figures from APRA, show that 3.1 million have applied and received funds with an average payout of $7,686, a staggering total of $31.7 billion in payments. Perhaps you were one of the 3 million that withdrew funds and now find yourself back on your feet with the economy starting to pick up. If so, here are my top 5 ways to rebuild your superannuation balance without breaking the bank. Salary sacrifice bite size amounts Modelling by Betashares suggested a $10,000 withdrawal today by a 35-year-old out of their super could result in a $70,400 deficit in 40 years, using an annual growth rate of 5 per cent plus CPI. To make up for this shortfall, consider deducting (salary sacrifice) $75 from your fortnightly pay into your superannuation. Over five years and with the power of compounding interest, this would see close to $10,000 return to your superannuation. As the deducted amount is small enough to digest (represents the cost of a cup of coffee a day), chances are it will not break the bank in the short term whilst rebuilding your super for the long term. The added bonus, receiving a tax break for your efforts. Check out the MoneySmart’s Superannuation calculator www.moneysmart.gov.au to find out more about the amount that works for you. Contribute a lump sum into super Maybe you find yourself having built up savings in the bank, funds that would otherwise be spent on holidays. Or if staying home has encouraged you to take time for an early spring clean you might like to sell off unwanted items and contribute the proceeds into your superannuation. This financial year is the second year that the Government has introduced the ability to contribute more than the maximum $25,000 per annum into super by utilising the unused concessional carry forward top up, if your superannuation balance is less than $500,000. Take John for example, who’s employer pays $11,400 each year as part of superannuation guarantee contribution. As John has accrued an unused super cap of $13,600 for each financial year, he is able to tip $20,000 of his savings into his super account in this financial year. The benefit? John replenishes his super and receives a tax deduction. Make a spouse super contribution If your spouse (husband, wife, or de facto) earns less than $37,000 per annum or not working, you may claim an 18 per cent tax offset if you make a personal contribution of up to $3,000 into their super. To be entitled to this tax offset, eligibility rules apply, and the receiving spouse must be under the age of 67, or if they’re aged 67 to 74, they must meet the work test or work test exemption requirements. Maximise the Government’s co-contribution Consider tipping $1,000 of savings or unused funds back into your superannuation as a personal contribution. This amount becomes quite rewarding if it is boosted by the Government’s co-contribution of $500. That is, for your $1,000 contribution into super, the government will top it up with an additional $500. To be eligible, you must be under age 71, earn less than $38,564 in the current financial year with a super balance less than $1.6m. Utilise Government incentives Did you know that if you earn $37,000 or less a year, and you (or your employer) make concessional super contributions, the government may refund the tax you paid on those contributions back into your super account, up to a maximum of $500 per year? If you’re eligible for the low-income super tax offset, it will be automatically calculated by the ATO and deposited in your super account after you lodge your tax return.  Source: https://treasury.gov.au/coronavirus/households/accessing-superannuation.  Source: https://www.apra.gov.au/covid-19-early-release-scheme-issue-17.  Source: https://www.livewiremarkets.com/wires/early-super-withdrawals-will-cost-taxpayers-more-than-100bn. Related Posts 5 Reasons To Check What Your Superannuation Is Up To Superannuation - every working Australian has an account but not all understand it. With the government’s recent scheme of early access to superannuation, activity within super accounts have been at all-time high, with 2.6 million Australians withdrawing funds. Overcoming Stress – 8 Strategies That Work As leaders we are often the person others are reliant upon and who people come to get answers. That is perfectly fine as we have chosen that line of work, and we are capable leaders, otherwise we wouldn’t be there. There will, however, be occasions when it really gets to us and it becomes a problem when it starts to affect our performance at work, our life away from work and our health. Here we discuss 8 simple strategies to help you reduce stress and operate at 100%. Fun In The Sun Are you looking for fun outdoor activities that the whole family will love? As our world is becoming increasingly reliant on technology and our kids are having more screen time than ever before, especially with the introduction of streaming programs such as Netflix and Stan, families are looking for ways to get their kids outdoors and enjoying wide open spaces. Keeping Active During the Festive Season If you have been diligent with your training and rituals for the past few months you should be looking and feeling so much better than you were only a matter of months ago. The weather is warming up quickly, and the festive season is just around the corner so let’s not let the ball slip now. The Benefits Of On-Demand Entertainment Netflix, Stan, Disney Plus, Spotify, Foxtel etc. These are all on-demand streaming services with millions of users every day that we have all probably used, or heard of once or twice, or possibly more. In the present form, you can pay as little as $6.99 a month for thousands of tv shows and movies available at the tip of your finger. Invest In You In 2020 In the following opinion piece, David Castledine, CEO of CCF NSW and the Institute of Civil Infrastructure, shares his personal approach to professional development. In my view, everyone should invest some time in personal learning. It’s good for themselves and their career, and it’s good for the industry. Everyone knows this, but few do it, particularly in the civil industry. Here is the strategy I have honed over my 40-year working career; it has taken me from Apprentice to CEO. Comment (0) Comments are closed.