When financial planner Rebecca Pritchard was starting her family, she used a little-known strategy called contribution splitting to keep her superannuation ticking over.
When Rebecca Pritchard and her partner were starting a family four years ago, she wanted to ensure her superannuation kept ticking over.
Ms Pritchard, 35, works as a senior financial planner at a firm in Melbourne/Naarm. She has two children aged three and four and says the contribution splitting strategy helped her feel more financially secure at a disruptive time.One of the key reasons for this super gender gap, ASFA says, is women taking time out of the workforce or working reduced hours to care for children.Meg Heffron is the managing director of a specialist superannuation advice firm.
The one time you can apply to split contributions before the end of the financial year is if you’re switching super funds, Ms Heffron says. Because concessional contributions are taxed at 15 per cent, you only split up to 85 per cent of the amount. For example, if your employer contributed $10,000 to your super, you could split a maximum of $8,500 of that to your spouse., however some funds have restrictions. For example, your fund might not allow you to split less than $1,000 of contributions., Ms Heffron says, particularly around splitting contributions to spouses close to retirement age..
“This contribution splitting is a great way of evening things up as you go … and it really does make a difference.” That's assuming the woman takes six months of unpaid leave and returns to work four days a week for four years.
Splitting Couples Contribution Contributions Super Retirement Children Gap Gender Women
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