As June 30 fast approaches, there is still time to consider the strategies available to you this financial year to build your wealth.
The opportunities to finish the financial year on a high note are endless, here are just a few:
Paying income protection premiums in advance
Income protection insurance pays a monthly benefit of up to 75% of your salary if you are unable to work due to illness or injury, with the premiums typically being tax deductible. Paying premiums in advance enables you to bring forward the following financial year’s premiums to claim a tax deduction this financial year. This strategy enables you to protect your existing and potential wealth by taking out insurance to cover you against those events which can disrupt even the best laid plans.
Paying interest in advance
Borrowing to invest is a tax-effective means of wealth accumulation – investors borrow for investment purposes, and claim the interest on the borrowed funds as a tax deduction. This strategy is consistent with many investors’ objectives as it allows you to purchase property, shares, or any other asset that generates assessable income. It also enables you to bring forward and pay next year’s interest cost and claim a tax deduction for those costs this financial year.
Making a non-concessional contribution to super (Government Co-contribution Scheme)
There is a federal government scheme in which people who earns $33,516 or lessa year (for the 2013/2014 financial year) and make a non-concessional contribution to superannuation (a contribution for which no tax deduction will be claimed), may be eligible to receive a government contribution to their superannuation. Under the scheme, the government will contribute $0.50 every dollar you contribute to your super fund in after-tax dollars, up to a maximum of $500 a year. For those eligible, this strategy can provide you with a guaranteed return on every dollar you contribute to super.
Making a concessional contribution to super
Concessional contributions to superannuation are those contributions made to super for which a tax deduction is being claimed. Using this strategy, anyone who earns less than 10% of their income from an employer can claim a tax deduction for contributions they make, up to maximum limits. This strategy can assist you to bolster your retirement savings whilst managing your tax liability prior to retirement.
Whilst there are many end of financial year strategies that have tangible benefits to assist both your wealth accumulation and protection objectives, there aren’t many days left to act. Speak to a financial planner and take action to benefit these and many other end of financial year strategies.