Does it matter what time of the year I contribute to my super?

Given the magic of compound interest, is it worth me maxing out my $30,000 concessional super contribution limit as early in the year as possible rather than spread out over the year?

Because of the way the mathematics of compounding work, the rate of return matters little if the time is short. Therefore, based on the mathematics alone there is no special benefit in paying monthly instead of yearly.

However, timing does affect potential gains or losses. If you make a lump sum investment in July and the market drops over the following 12 months, you could see a loss (though only on paper). Conversely, if the market starts low in July and rises over the next year, you could see a gain.

I think monthly payments are best for the average person because you can take advantage of dollar cost averaging, which smooths out volatility, and most people find it easier to pay $2500 a month than $30,000 in one lump sum.

I read your recent answer about a 75-year-old making superannuation contributions, but I’m still confused. Can you elaborate, please?

Determining what non-concessional contributions can be made is a two-step process.

You must first assess whether you are eligible to contribute – this is a question of age. The deadline to make any non-concessional contributions is 28 days from the end of the month you turn 75. This means a person who turns 75 in June this financial year can contribute up until 28 July, which falls into the following financial year.

The second step is to determine how much. The standard cap of $120,000 applies to everyone eligible to contribute (subject to their total super balance on the previous June 30). However, those who are age 74 or younger on July 1 of the financial year can use the “bring forward” rule to make maximum non-concessional contributions of $360,000 (again, subject to their total super balance).

This is a complex topic – I recommend anyone considering it get advice.

We are told that delisted shares must be sold before a capital loss can be claimed against a capital gain. Commsec tell me they do not sell delisted shares. Computershare, who issued the shares, only state they have no value. How can this capital loss be claimed?

Lyn Formica of Heffron says the owner of a stock which has been delisted can’t claim a capital loss until either:

• the liquidator declares in writing that there will not be any further distributions from the company (which could be many years down the track), or
• the shares are sold to someone else.

When a stock is unable to be sold on market, it may still be possible to do an off-market transfer from the current owner (e.g., a super fund) to the member personally.

If the seller is an SMSF, it will be important that the sale price is the current market value of the stock (presumably nil) and that there is something to evidence that value – so, for example, a report from Computershare showing the stock to be worthless.

It’s possible the share registry will refuse to process the off-market transfer form. That’s OK – the sale has still happened. But the form should be kept on file in case there is a distribution from the company in the future. If you get notification of that happening, then you’d attempt to re-lodge the form with the registry, which will usually have resumed processing.

My wife is 69 and on the aged pension. She gets an income stream of $1600 a fortnight from her super fund. I am 65 and retired and not claiming anything through Centrelink. Can we take a lump sum from the retirement part of her super and put it into my super account?

She can certainly make a tax-free withdrawal from her super fund, and given you are under 75 you can make a contribution to your fund. As you are under pensionable age, money held in superannuation in your name will be an exempt asset for Centrelink purposes, providing you don’t start a pension from your fund. Depending on the amount of the withdrawal, the strategy you mention may give her a good increase in her age pension.

Noel Whittaker is the author of Retirement Made Simple and other books on personal finance. noel@noelwhittaker.com.au

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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