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Source: Supplied
Although it may not be the most romantic topic, Australians are encouraged to discuss superannuation with their partners. Experts suggest that couples might be missing out on potential tax offsets and significant increases in retirement savings by not having these discussions.
Spousal contributions enable Australians to deposit funds into their partner’s superannuation account, allowing a tax offset of up to $540 if the partner has a low income or is unemployed. This can be a key strategy for securing both partners’ retirement futures.
Pip Thorne, a mother of three from Melbourne, shared that her husband, Rob Woodside, consistently made spousal contributions to her superannuation while she was on parental leave. According to the now 49-year-old, these contributions have “definitely” made a significant impact on her super balance.
“I took a break for four and a half years, and we maintained contributions throughout that time,” Thorne remarked.
“That’s a lengthy period to forgo super payments, but it allowed my balance to keep growing.”
“It benefited us as a couple by enhancing our savings and was also advantageous for my superannuation.”
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Source: Supplied
Peter Treseder, an education manager at AustralianSuper, told Yahoo Finance that spousal contributions are frequently utilized when one spouse is not earning an income, is employed part-time, or is casually transitioning back to work after parental leave.
“These are after-tax contributions, meaning they enter superannuation without tax. Additionally, there’s the advantage of receiving a tax refund at the end of the financial year,” Treseder explained.
The spouse receiving the contribution benefits from an increase in their superannuation balance, which grows over time.
“The earlier you invest in your super, the greater the benefits due to the power of compound interest,” Treseder added.
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You can directly contribute to your partner’s superannuation fund, which may grant you eligibility for a tax offset, contingent on your partner’s income.
“Essentially, I can claim up to 18 percent of what I contribute to my spouse’s super, which equals $180 for every $1,000 contributed,” Treseder explained to Yahoo Finance.
“Nevertheless, the tax offset caps at $540, which corresponds to 18 percent of a $3,000 contribution. Regardless of whether I contribute $3,000, $5,000, or $10,000, I would still attain the maximum tax offset of $540.”
