1. Take Advantage Of Superannuation: 

• You can leverage tax breaks by salary-sacrificing into your super. Superannuation is taxed at a maximum 15%, whereas, your personal marginal tax rate could be upwards of 45%.  
• Concessional (before-tax) contributions have a cap of $27,500, while non-concessional contributions have a cap of $110,000 (after-tax). 
• Consider utilising carry forward unused concessional contribution caps if you’re expecting a larger tax bill. For instance, you may be expecting a tax bill after selling your investment property. You can utilize superannuation to reduce the tax bill.  
• The drawbacks to maximizing superannuation contributions is benefits are preserved until you meet a condition of release. So if you’re young, you have to weigh up the pros and cons of foregoing money now for money tomorrow.  
• Salary sacrifice arrangements will reduce your take-home pay.  

2. Time the Sale of Your Business: 

• There are opportunities for Small business owners to not only reduce capital gains on the sale of their business and business assets, but also boost retirement savings through strategic planning. 
• Utilize concessions like the 15-year exemption and small business retirement exemption for tax-free contributions to super. 
• If you finish working at 30 June, you may want to sell your business in the next financial year (from 1 July) as you will be splitting your taxable income over 2 financial years.  

3. Be Strategic About Taking Leave: 

• Plan long service leave and retirement timing for tax savings and continued super contributions. 
• Taking long service leave as time off before retiring ensures ongoing salary, super, and accrued holidays. It also helps to stabilize cashflow as you transition into retirement phase.  
• If you were to take your Long Service Leave as a lump sum payment, this will be taxed at your top marginal tax rate. A lump sum payment however won’t attract any additional superannuation contributions.  
• There may also be implications for your Age Pension eligibility so consult with a financial professional.  
• The options are there, but it all depends on your personal circumstances and whether you require the lump sum immediately, or can delay it.  

4. Upsize Retirement Wealth with Downsizer Contributions: 

• Downsizer contributions provide a strategic avenue for converting real estate profits into tax-effective contributions to superannuation. 
• This allows individuals and couples to leverage the value accumulated in their property for enhanced retirement savings. 
• Empty-nesters can contribute up to $300,000 for individuals and $600,000 for couples to super using downsizer contributions, from the sale of the family home. 
• Downsizer contributions don’t count toward regular contribution caps but must be transferred within 90 days of property settlement and accompanied with the relevant forms.  
• Common misconception, despite it being called ‘Downsizer’, there is no obligation to sell your main residence and then have to purchase a smaller property with the proceeds.  

5. Search Out Best Rates: 

• Explore fixed-term deposit rates to potentially earn higher returns on savings. 
• Be aware of terms and conditions as some accounts may have restrictions or penalties for withdrawals, impacting the flexibility of accessing your savings. 
• Distinguish between introductory interest rates and ongoing rates. 
• Introductory rates may be higher initially but could drop after a specified period, while ongoing rates provide a stable, long-term return. 

• Align the chosen savings account with your financial goals. 
• If you have specific savings objectives, such as purchasing a home or funding education, choose an account that complements these aspirations 

6. Fundamental Investment Concepts for first time investors: 

• Some fundamental concepts to investing you should know to set yourself up with good foundations for the long-term 
• Diversification is key 
• Invest for the long-term/compounding returns: investing isn’t a get rich quick scheme. Warren Buffet is famous for getting rich slow and his emphasis on the concept of compounding. Compounding is the process of earning interest on interest which accelerates the growth or your wealth over time. 
• Educate yourself – if you don’t want to read a finance book, listen to a podcast (“Wealth Radar”), plenty of finance channels on Youtube…but a good financial adviser can help you discern fact from fiction. 

If you want to learn more about the strategies discussed today, get in touch with Ben and the friendly and experienced team at Fowlers Group. For email and phone contact details, head to the website www.fowlersgroup.com.au.  

Click below and listen as Ben chats with John Mackenzie on 4CA Cairns: