As the 30th of June rapidly approaches, there’s still an opportunity to explore the available strategies this financial year to bolster your wealth. Let’s delve into some of these options.

Prepaying Investment Loan Interest

Borrowing to invest is a tax-effective way to accumulate wealth. Investors take out loans for investment purposes and claim the interest paid as a tax deduction. This approach aligns with many investors’ objectives, enabling them to acquire assets like property, shares, or any other income-generating investment.

Additionally, it allows you to prepay next year’s interest costs and claim a tax deduction for those expenses in the current financial year.

Utilising the Government Co-contribution Scheme

The federal government offers a scheme where individuals earning less than $43,445 per annum and making non-concessional (after-tax) super contributions may be eligible for a government co-contribution. Under this scheme, the government will contribute up to $0.50 for every $1.00 you contribute to your super fund, capped at $500. This entitlement gradually reduces for every dollar earned above the $43,445 threshold until it phases out at an annual income of $58,445.

For those eligible, this strategy can provide an attractive return on every dollar contributed to super.

Making Concessional Super Contributions

Concessional contributions to superannuation are those for which a tax deduction is claimed. Most individuals can claim a tax deduction for contributions made up to the current maximum limit of $27,500 per annum, inclusive of any Superannuation Guarantee contributions made by their employer.

If your total superannuation balance was less than $500,000 on 30 June of the previous financial year, you may be entitled to make additional concessional contributions for any unused amounts carried forward.

The federal government also offers a 15% Low Income Superannuation Tax Offset of up to $500 on concessional contributions made by individuals with a taxable income below $37,000 per year.

This strategy can assist you in boosting your retirement savings while managing your tax liability prior to retirement.

Prepaying Income Protection Premiums

Income protection insurance can provide a monthly benefit of up to 75% of your salary if you’re unable to work due to illness or injury, with the premiums being tax-deductible. Prepaying premiums enables you to bring forward the following financial year’s costs and claim a tax deduction in the current financial year.

This strategy allows you to protect your existing and potential wealth by securing insurance coverage against events that could disrupt even the most well-planned financial strategies.

There are numerous end-of-financial-year strategies that offer tangible benefits to assist your wealth accumulation and protection objectives. Contact us now to discuss and implement any of these strategies that align with your goals.