|keep your caps on|
For 2012-13 and 2013-14, the concessional contributions cap is $25,000. These are the contributions made from pre-tax or untaxed income and include your employer’s compulsory 9 per cent super contributions*, voluntary salary sacrifice contributions and any personal tax deductible contributions you make. Higher income earners and people last year who, aged 50 or more, contributed up to the old $50,000 cap and haven’t changed their salary sacrifice contributions need to check their superannuation contributions to ensure they don’t go over the $25,000 cap. Generally, anyone earning up to $277,778** and whose employer contributes 9 per cent on their total salary will not challenge the cap, but it will restrict any ability to make extra salary sacrificed contributions. There have been cases where some late paying employers included 13 months worth of contributions which have pushed some employees over the cap. Checking now gives the member the opportunity to adjust any salary sacrifice contributions which may put them over. Any money which breaches the $25,000 cap is taxed another 31.5 per cent on top of the usual 15 per cent contributions tax.
**This amount will reduce to $270,270 for the 2013-14 financial year.
|is it time to take the fix?|
Short-term fixed interest rates for home loans have fallen below variable rates, with the major banks offering rates of 4.99 per cent for two-year loans. If you are considering taking on a fixed interest rate, note what the comparison rate is – which compares loans of $150,000 over 25 years – between institutions. It incorporates monthly fees and application costs, which may not apply if you have a loan with the same institution. More rate cuts are predicted this year, so taking a fix does involve some risk and if you decide to fix, you should consider fixing only part of your loan.
|bring your credit home|
Many of us like to focus on clearing our holiday credit card debt early in the year. For home owners, the best way is to consolidate and use any advance payments on their home loans to clear their credit. Interest rates on home loans are around two-thirds lower than many credit cards, many of which are featuring plus-20 per cent interest rates. The trick is to ensure you increase your repayments to cover the increase in debt, allowing you to clear it cheaper and faster than you would have.