With the end of the financial year fast approaching I thought it would be great to share some tips from a recent discussion that I had with my favourite financial planner, Domenic from Trend Financial. Please note that the information contained in this blog is all general content and professional advice should be engaged for your personal situation.
The end of the financial year may come and go from most people but it should be seen as an opportunity for planning and taking control.
* Have you considered taking part in the government super co-contributions scheme – this is the last year to get the $1,000 – next financial year it is reducing to a maximum of $500.
For people earning under $31,920 you are eligible for the maximum co-contribution. For every dollar up to $1,000 you add to your super fund the government will match your contribution. That’s a 100% gain on your investment, hard to achieve! When your income is above $31,920 the co-contribution paid by the government is scaled down to $0 for a person that earns $61,920.
To be eligible for the government contribution your payment must be received by your superannuation fund by the 30 June 2012 – so get a move on!
* Take advantage of maximum concessional super contributions. Currently if you are over 50 years old you are able to contribute $50,000 to your superannuation fund and only be taxed at a rate of 15%. After 1st July 2012 this will be halved to only $25,000, which is the current limit for anyone under 50 years old. Again contributions must be received by the superannuation fund before the 30 June 2012.
* Medicare Levy surcharge – make sure you are covered for the next financial year – do you need to take out cover to protect yourself from the surcharge by next financial year. You have the option to prepay your whole premium or pay it monthly. An increased Medicare surcharge will apply to those earning more than $97,000/$194,000 who don’t take out private health insurance.
On the topic of private health insurance, another important change from the recent Federal Budget from 1 July 2012 is that the private health insurance rebate which will be means tested. From July 1, the full rebate will only apply for singles earning up to $84,000 and couples earning up to $168,000. A reduced rebate will apply for those earning between these amounts and $130,000/$260,000, with higher earners missing out altogether.
A lot to digest and there are many more tips that I could share. As you can see, planning what you need to do before 30 June 2012 is important. Taking the time to have a financial plan completed for yourself or family is very important. Start the new financial year in the right direction – is only 22 days away.