Tax Planning Australia: Part 5 - Superannuation And Retirement Strategy Considerations

Written by: Melissa Cunliffe

This is Part 5 of our tax planning Australia series, where we explore the key things to consider before 30 June.

In Part 4, we explored bucket companies and how they can be used effectively to cap tax and retain wealth. In Part 5, we focus on superannuation and retirement planning, and how tax planning in Australia helps align your financial position with your long-term goals.

Start with the end in mind: Superannuation and retirement goals

Effective tax planning in Australia is not just about this financial year—it’s about your long-term future.

A key question to ask is:

If you were to retire tomorrow, what would that look like?

• When do you want to retire?

• How much do you need to live comfortably?

• What level of income will support your lifestyle?

Planning early gives you control over when you retire—rather than your bank balance making that decision for you.

Guiding you through superannuation and retirement planning, every step of the way.

Using superannuation as a tax-effective strategy

Superannuation remains one of the most effective structures for tax planning in Australia.

One common strategy is making additional personal contributions and claiming a tax deduction in your own name.

This can:

• Reduce your taxable income at your marginal tax rate

• Result in contributions being taxed at 15% within the super fund (in most cases)

Depending on your circumstances:

• Some individuals may pay up to 30% contributions tax (Division 293 rules)

• Others in pension phase may pay no tax within super

• From 1 July 2026, additional rules (such as Division 296) may impact tax outcomes for larger balances

For many clients, however, superannuation continues to offer a significantly lower tax environment compared to personal tax rates.

Maximising contributions: timing and strategy

Understanding contribution caps and timing is critical.

• The 2025–26 concessional contributions cap is $30,000

• The 2026–27 cap is expected to increase to $32,500

With careful planning, it may be possible to contribute up to $62,500 before 30 June, using a contribution reserve strategy.

This involves:

• Making a larger contribution before 30 June

• Claiming the deduction in the current financial year

• Allocating a portion (e.g. $32,500) to a contribution reserve, which is applied in the following financial year

Importantly:

• The reserved contribution must be allocated within 28 days

• Strict compliance requirements apply

This type of strategy can be particularly useful in strong income years where cash flow allows.

Note: This is not financial advice. A licensed financial adviser should be involved when implementing superannuation strategies.

Primary producers: rethinking farm management deposits (FMDs)

For primary producers, farm management deposits (FMDs) have long been a valuable tax planning tool in Australia.

In simple terms:

• Deposits into an FMD scheme are tax deductible in the year they are made (subject to conditions)

• Funds must generally be held for at least 12 months

• When withdrawn, the amount is assessable income and taxed

This makes FMDs effective for smoothing fluctuating income across good and bad years.

However, as you get older and closer to retirement, the strategy often needs to evolve.

In many cases, FMDs become less attractive compared to superannuation.

A common strategy involves:

• Gradually withdrawing FMDs over a number of years

• Offsetting the taxable income from those withdrawals with deductible super contributions

Why?

Because:

• FMD withdrawals are fully taxable

• Super contributions can reduce taxable income (similar to FMDs)

• Funds contributed to super may ultimately be accessed tax-free once you are over 60 and meet a condition of release

This creates an opportunity to:

• Transition wealth from a taxable environment

• Into a more tax-effective retirement structure

Careful timing and planning are essential to ensure this strategy is implemented effectively.

Planning as you approach retirement

Superannuation strategies become even more powerful as you approach retirement.

For example:

• If you are nearing age 60 and will soon have access to your super

• If you are transitioning to retirement

• If your taxable income is currently high but expected to reduce

Strategic contributions now can result in:

• Immediate tax savings

• Increased tax-free retirement benefits

• Greater flexibility in future income planning

Combining superannuation and bucket company strategies

Superannuation should not be viewed in isolation.

As discussed in Part 4, a bucket company strategy can work alongside your superannuation plan.

This combination can:

• Allow wealth to be retained in a company at capped tax rates (25–30%)

• Provide access to funds via dividends or wages if needed

• Complement superannuation, particularly where contribution limits restrict further contributions

This is especially relevant with the introduction of Division 296, which may increase tax on larger super balances.

For clients with significant wealth in super:

• Allocating additional wealth to a company structure may provide flexibility

• It can also assist with asset protection and estate planning

A balanced approach—between superannuation and company structures—can be highly effective when implemented correctly.

The power of compounding and early planning

One of the most underestimated factors in retirement planning is compounding.

The earlier you start:

• The longer your investments grow

• The greater the impact on your final retirement balance

Even small, consistent contributions can result in significant long-term outcomes.

Tax planning provides the perfect opportunity each year to:

• Review your current position

• Understand your goals and aspirations

• Adjust your strategy

• Ensure you are on track

Bringing it all together

Effective tax planning in Australia is about aligning your:

• Current financial position

• Future goals

• Retirement strategy

• Family and estate planning

By reviewing these areas before 30 June each year, you can ensure you are implementing the most appropriate strategies at the right time

Take action before 30 June

If you are reviewing your tax planning Australia strategy, now is the time to act before the 30 June EOFY deadline.

Book your tax planning appointment with our team today and ensure your strategy is aligned with your goals and long-term wealth plans.

---

Disclaimer  

This article does not constitute financial advice and is for general information only. It does not take into account any individual’s personal objectives, situation or needs, and is not intended as professional advice. Any similarity to an individual’s personal circumstances and the examples provided in this article is purely coincidental. Any person acting upon such information without receiving specific advice, does so entirely at their own risk.  

Authorisation under an Australian Financial Services Licence (AFSL) is not required in the provision of this article and the author plus Future Accounting Group Pty Ltd is not acting in its capacity as an Australian Financial Services Licence holder 

Liability limited by a scheme approved under professional standards legislation.

---