I wish to start putting some extra money aside into super myself (I earn $55k and wish to put some money aside each year (up to $5000). The question is i think this extra will be tax deductible? And also what are the requirements if we need to access it later - are we able to withdraw the money that we have put in)
Yes, the $5,000 could be tax deductible. There are some forms you will need to prepare and lodge with your super contribution & annual tax return but yes, it can be deductible.
Be mindful of the annual limits on these types of contributions of $25,000 pa. This includes whatever contributions your employer is making for you as well as this $5,000.
You will not be able to access this money once you've put it into super until you satisfy what's known as a condition of release - generally you reach a certain age & retire (there are some other options). So, depending on your age, you may not be able to access the money for quite some time. Please keep this in mind if making any extra super contributions.
The 2017 Federal Budget did propose allowing people to use their super contribution to help buy a first house but as yet this has not been legislated so don't rely on that just yet.
Please let me know if I can help any further.
Good work on thinking more about nest egg in retirement and James is correct in the information he has provided.
I would also like to add that if you are contributing additional funds into superannuation, you should consider the following:
- Your asset allocation and where your funds are being invested?
- What type of superannuation product you are in and what fees you are paying?
- What insurances are inside the fund and is there an option to fund further insurances with your extra contributions if you are under insured?
- Why will you be putting the money into super?what are your goals and objectives?
If you would like to discuss anything from the above further, please let me know. I can see you are in Campbelltown and my office is in Oran Park, happy to catch up and discuss your options further as I am not far away.
Ronald Pratap | Principal Financial Adviser
RP Wealth Management
t: 02 9188 1547 m: 0434 502 079
a: Level 2, 351 Oran Park Drive, Oran Park 2570