Working mums receive super boost
Working mums will have the opportunity to boost their super thanks to contribution rules which came into play for the 2019/20 tax year.
The five year carry forward rule would mean someone returning to work who hasn’t made super contributions for the year just ended would be able to take advantage of the allowable contribution limits as well as the unused limit for the previous year.
It would also help those women who were approaching retirement.
Access to catch up contributions were only allowed if you have less than $500,000 in super and the normal annual limit for tax-deductible concessional contributions is $25,000 and must allow for employers Super Guarantee within that limit.
Head of advice at Dixon Advisory, Nerida Cole, said: “This new rule will allow more flexibility to ‘catch up’ on contributions on those lost super years.
“It means you are able to back pay into your super, which is especially important to mothers as they return to work and women as they prepare for retirement. Women continue to face significant challenges in achieving financial security as they retire from the workforce and retire with almost 50 per cent less in super than men.”
She advised women should only make the extra contributions if they had already checked they had sufficient cash reserves, had cleared all credit and high interest debt and did not need to pay down more of their mortgage.
AUTHOR
Laura Dew
Recommended for you
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
New Zealand’s financial regulator is following the footsteps of its Tasman neighbours and proposing to conduct a review on improving the accessibility of financial advice and advice business models.
