The Zen of Conversation and Superannuation Contributions

There are indeed matters more significant than Life (Insurance). In the spirit of our ethos at Examined Life to enrich as well as protect the lives of those we work with, we are pleased to present you with the following contemplative piece by Brian Stanton.

“This constant self-reification, it seems, is perfectly opposed to the other side of dialogue: listening. When we listen to someone speak, we seldom do so with an open mind. Instead, we are busy conjuring a clever response to reveal our mastery of the issue at hand. Our goal is to articulate our views, not to learn.” Brian Stanton, Primal Sapien

Read Brian’s full blog here: http://www.primalsapien.com/the-zen-of-conversation/

Finding the Zen of superannuation contributions can justifiably seem even more difficult than the art of conversation. With yet further changes announced in last month’s federal budget, you do need to revisit your superannuation contribution strategy.

As the financial year end fast approaches and many of us are contemplating salary sacrifice and concessional superannuation contributions, don’t forget to include in your total contributions the premiums for insurance (life, TPD and possibly TTD) held within superannuation. We’ve previously discussed the merits, and implications of holding insurance within either your own Self Managed Super Fund (SMSF) or a life insurance policy with an insurer via their superannuation trust. This allows many self-employed individuals to claim a tax deduction for the premiums on these insurances (as they are effectively a superannuation contribution).

If you are looking to maximise your concessional superannuation contributions before the end of the financial year, ensure that you include these insurance premiums in the total. Failing to do so may mean that you exceed the limit and pay extra tax. For the current financial year (ending 30 June 2016) the limits are $30,000 for most (and $35,000 for those aged 49 or older on 30 June 2015).This limit will then decrease to $25,000 from 1 July 2017, with proposed catch-up provisions for those who have not contributed the maximum in the past.

The other significant proposed change in the 2016 budget involved non-concessional (after tax) contributions, with a lifetime limit to apply. This lifetime limit is proposed to be backdated to 1 July 2007 (the controversial ‘non-retrospective’ backdated provision).

One might justifiably feel they needed to acquire some sort of guru-status to understand superannuation amid the plethora of changing requirements. We are always here to help make sense of the complex and determine what’s relevant to you.