How $800K in Super Becomes $664K

If your superannuation is left to your adult children, they may not receive the full balance you intended due to the way super death benefits are taxed. For example, if you pass away with an $800,000 super balance, your adult children may receive only around $664,000 if the balance consists of taxable components that are subject to tax. The good news is that there are strategies that may help reduce or even eliminate that tax liability, but they generally need to be implemented while you're alive and have access to your superannuation. One of the most commonly used strategies is a recontribution strategy. This involves withdrawing money from your super and then recontributing it as a non-concessional contribution. Unlike concessional contributions made during your working years, non-concessional contributions form part of the tax-free component of your super. This means it's important not to claim a tax deduction on the recontributed amount. By carrying out this strategy over multiple financial years, it may be possible to progressively reduce the taxable component of your superannuation. For people whose beneficiaries are adult children or other non-financial dependants, this can significantly reduce the tax they may otherwise have to pay on inherited super and help preserve more of your wealth for the next generation. General advice only. Amy Lehmann is an Authorised Representative (No. 1292710) of Consortium Private Wealth Pty Ltd (AFS Licence 495401).

Disclaimer || The information provided in this post is general in nature only and does not constitute personal financial advice. Amy Lehmann is an Authorised Representative(No. 1292710) of AFSL 495401.