Understanding Your Total Superannuation Balance (TSB)
Your Total Superannuation Balance (TSB) is a key aspect of managing your superannuation effectively. It influences your eligibility for various contributions, government incentives, and retirement planning strategies. By understanding and keeping an eye on your TSB, you can make informed financial decisions and enhance your retirement savings.
What is Total Superannuation Balance (TSB)?
Your TSB represents the total value of all your superannuation interests across all accounts as of June 30 each financial year. This includes:
- Accumulation Phase Accounts: These are the accounts still receiving contributions and earning returns.
- Retirement Phase Accounts: These include accounts providing retirement income, such as account-based pensions.
- Rollovers: Amounts that are in transit between funds and have not yet been credited to a specific account.
- Defined Benefit Interests: The notional value of defined benefit pensions and similar arrangements.
Why is TSB Important?
Your TSB is crucial because it determines your eligibility for several superannuation benefits and strategies:
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Non-Concessional Contributions (NCCs): If your TSB is $1.9 million or more (2024/25), you will not be able to make NCCs. This limit can restrict your ability to grow your superannuation.
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Bring Forward Rule: This rule allows you to contribute larger amounts in a single year ($330,000), but eligibility depends on your TSB.
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Government Co-Contributions: If your TSB reaches $1.9 million or more, you won't be able to access co-contributions from the government, missing out on potential boosts to your super.
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Concessional Contributions: The ability to carry forward unused concessional caps is also linked to having a TSB below certain thresholds.
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Spouse Contributions and Tax Offsets: Eligibility depends on your TSB and income thresholds.
How to Track Your TSB
Keeping track of your TSB is essential. Here are some ways to do it:
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MyGov Account: Link your MyGov account to the Australian Taxation Office (ATO) to access your superannuation details easily.
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Super Statements: Your super fund sends annual statements with updates on your balances. Review these carefully.
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Contact Super Funds: Reach out directly to your super funds to confirm all accounts are included in your TSB calculation.
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Financial Adviser Tools: Professional advisers can use specific tools to consolidate TSB data from multiple accounts, making it easier for you to manage.
Managing Your TSB Effectively
Here are some strategies to effectively manage your TSB:
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Consolidate Super Accounts: Reducing the number of accounts you have can help to minimise fees and simplify TSB tracking.
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Contribution Strategies: Make both concessional and non-concessional contributions within the allowable caps to grow your super.
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Leverage Downsizer Contributions: If eligible, you can contribute up to $300,000 (or $600,000 for couples) from the sale of your home without affecting your NCC cap.
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Monitor Rollovers: Ensure that all rollovers are processed correctly to avoid errors in your TSB calculations.
Common Pitfalls to Avoid
To manage your TSB effectively, be aware of these common pitfalls:
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Exceeding Contribution Caps: Failing to monitor your TSB can lead to excess contributions, resulting in penalties.
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Ignoring Defined Benefit Interests: These must also be included in your TSB calculations, so dont overlook them.
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Overlooking Small Balances: Consolidate smaller accounts to ensure accurate TSB tracking and reduce fees.
How Acton Wealth Can Help
At Acton Wealth, we specialise in helping you accurately track and manage your Total Superannuation Balance. Our services include:
- Developing tailored strategies to optimise your contributions and maximise tax benefits.
- Ensuring compliance with TSB thresholds to avoid penalties.
- Aligning your TSB with your long-term retirement and estate planning goals.
Our team is ready to help you take control of your financial future.
