Superannuation makes big money when a couple combines forces

Superannuation balances can be boosted significantly and tax savings await for people who are generous towards their partner.

Teamwork creates better superannuation results. Picture: iStock

This could be one of the nicest things you do for your spouse this week.

And while they may not thank you now for it, you should be in their good books for years and even decades down the track.

It’s all to do with superannuation, which many Aussies see as a boring financial topic – until, of course, they get closer to retirement and release that a healthy super balance means fun and freedom in the second half of their life.

Unlike bank accounts that can be jointly-owned, our superannuation account is our own. Even if it’s within a self-managed super fund, your portion is your portion and your partner and kids’ portions are theirs.

However, just because we own super solo doesn’t mean we can’t share the love with a spouse.

There can be financial windfalls for doing this – not to mention more thankyous.

Sharing superannuation delivers more than just good vibes. Picture: iStock

A recent survey by Finder.com.au reported that just 5 per cent of people contributed to their partner’s retirement savings, and noted that women’s average super balances are still well below men’s.

Financial advisers say not enough people consider pumping money into their spouse’s super, even though it can benefit both members of a couple. There can be bigger tax refunds, higher pension payments and government handouts.

And there’s no risk of you losing money if your marriage goes down the toilet years from now. In a divorce, each partner’s super goes into the pool of assets to be split. What’s mine is yours, literally.

These four key super strategies show how being nice to your spouse can be nice for you too.

SPOUSE CONTRIBUTION

If you spouse earns less than $37,000 a year, you can get $540 back from the Australian Taxation Office if you inject $3000 into their super fund. A lower tax offset is available if you contribute less or your spouse earns between $37,000 and $40,000.

This strategy is ideal for when a spouse takes extended time off to care for children.

CO-CONTRIBUTION

More free money from the federal government comes through the co-contribution scheme.

Anyone earning up to $45,400 this financial year who makes a $1000 personal contribution to their super account gets a $500 co-contribution from the government. That’s an immediate 50 per cent return on investment, and smaller co-contributions apply for people earning up to $60,400.

The contribution has to come from the member, not their spouse, but joint household savings will work here.

SUPER SPLITTING

People can beef-up their partner’s super balance significantly by asking their super fund to transfer up to 85 per cent of a financial year’s super contributions to their spouse’s account.

This can be done every year, and could help keep one partner’s super under $500,000 so they quality for tax-deductible benefits such as catch-up contributions. It also evens out a couple’s total superannuation wealth – which can help later with retirement strategies and balance caps.

USING AGE TO ADVANTAGE

A handy strategy when couples have an age gap can be the older retiring partner putting a chunk of their nest egg into the younger partner’s super.

This can mean that the older partner gets more age pension, because the super balance of the younger partner does not count in the pension assets test until they themselves reach age 67.

However, the younger spouse’s income will still be means tested by Centrelink, so get advice before considering this strategy.

Originally published as Superannuation makes big money when a couple combines forces