Saving together: How to use tax and superannuation rules to boost retirement savings

Tax savings and other benefits come from couples treating superannuation and investments as a team effort. Experts explain why.

Helping a spouse save for retirement is not just a nice thing to do.

It also makes financial sense for couples to work as a team to take advantage of Australia’s tax and superannuation rules and incentives.

Catapult Wealth director Tony Catt says couples “don’t want to end up lopsided” when it comes to ownership of their investments and superannuation. “Ultimately the goal is to try to get your super balances and investment assets as equal as you possibly can for an equalisation of tax advantages,” he says.

Start saving for retirement together before your wealth gets out of whack. Picture: iStock

“A lot of couples think they have plenty of time to equalise it down the track but it’s amazing how quickly compounding returns can mean these things do get out of whack early on.”

Here’s what to consider.

SPOUSE CONTRIBUTIONS

Fancy a free $540 cash through a tax offset? If your spouse earns less than $37,000 a year and you contribute at least $3000 into their super fund, that money can come your way.

A reduced offset is available for people who contribute less or their spouse earns between $37,000 and $40,000 benefit couples with spare cash. “Any savings you can make, with a bit of tax saving, makes sense,” he says.

SUPER SPLITTING

JBS Financial Strategists CEO Jenny Brown says Australians can generally split up to 85 per cent of their before-tax super contributions – such as compulsory employer payments or salary sacrifice – with their spouse.

Catapult Wealth director Tony Catt

JBS Financial Strategists CEO Jenny Brown

“It evens up balances and if one spouse it older it’s often good to do it,” she says. This is because an older partner is able to access their super first and enjoy its zero tax rates for retirees. Cashed-up couples can also add inject $100,000 of after-tax money into both partner’s super each year.

INVESTING WISELY

Whether for shares, an investment property or other assets, it’s often a good idea to hold them jointly, but Brown recommends seeking advice first.

Much depends on timing. For example, if a retiree couple sells an asset for a $200,000 capital gain, the tax payable could be $20,000 more if it’s held in only one partner’s name.

“You need to be aware of the short, medium and long term,” Brown says.

@keanemoney