Turbocharge your super before 30 June

As the end of the financial year approaches, it’s crucial to take proactive steps to maximize your superannuation benefits. Craig Banning, CEO & Senior Wealth Adviser at Navwealth, emphasizes, “Taking advantage of the available superannuation strategies before 30 June can significantly enhance your retirement savings and provide substantial tax advantages.”

What you need to consider first

If you have more than one super account, consolidating them to one account may be an option for you. Consolidating your super could save you from paying multiple fees, however, if you have insurance inside your super, you may be at risk of losing it, so contact us before making any changes.ⁱ

How to boost your retirement savings

Making additional contributions on top of the super guarantee paid by your employer could make a big difference to your retirement balance thanks to the magic of compounding interest.

Key strategies to consider to boost your super before 30 June:

Maximise Concessional Contributions (before tax): These contributions can be made from either your pre-tax salary via a salary-sacrifice arrangement through your employer or using after-tax money and depositing funds directly into your super account.

Apart from the increase to your super balance, you may pay less tax (depending on your current marginal rate).ⁱⁱ

Check to see what your current year to date contributions are so any additional contributions you may make don’t exceed the concessional (before-tax) contributions cap, which is $30,000 from 1 July 2024.ⁱⁱⁱ

Utilise the Carry-Forward Rule: If you haven’t reached your concessional contributions cap in previous years, you may be eligible to carry forward unused amounts from up to five years, provided your total super balance is below $500,000. This strategy allows you to make larger contributions in the current year.

There are strict rules around this type of contribution, and they are complex so it’s important to get advice before making a catch-up contribution.

Consider Non-Concessional Contributions: This type of contribution is also known as a personal contribution. It is important not to exceed the cap on contributions, which is set at $120,000 from 1 July 2024.^iv

If you exceed the concessional contributions cap (before tax) of $30,000 per annum, any additional contributions made are taxed at your marginal tax rate less a 15 per cent tax offset to account for the contributions tax already paid by your super fund.

Exceeding the non-concessional contributions cap will see a tax of 47 per cent levied on the excess contributions.

Spouse Contributions: There are two ways you can make spouse super contributions, you could:

• split contributions you have already made to your own super, by rolling them over to your spouse’s super – known as a contributions-splitting super benefit, or
• contribute directly to your spouse’s super, treated as their non-concessional contribution, which may entitle you to a tax offset of $540 per year if they earn less than $40,000 per annum

Again, there are a few restrictions and eligibility requirements for this type of contribution.

Downsizer contributions: If you are over 55 years, have owned your home for 10 years and are looking to sell, you may be able to make a non-concessional super contribution of as much as $300,000 per person – $600,000 if you are a couple. You must make the contribution to your super within 90 days of receiving the proceeds of the sale of your home.

Review Your Investment Strategy: Ensure your superannuation investments align with your retirement goals and risk tolerance. Regular reviews can help optimize returns and adjust for changing market conditions.

Action Steps Before 30 June:

• Assess Your Contribution Levels: Review your contributions for the year to ensure you’re maximizing available caps and benefits.​
• Consult with a Financial Adviser: Engaging with a professional can provide personalized strategies tailored to your financial situation and goals.​
• Lodge Contributions Early: To ensure contributions are processed before the end of the financial year, it’s advisable to make them well before 30 June.

By implementing these strategies and seeking expert advice, you can significantly enhance your superannuation savings and set a strong foundation for your retirement. Reach out to our team below.

i Transferring or consolidating your super | Australian Taxation Office

ii Salary sacrificing super | Australian Taxation Office

iii Concessional contributions cap | Australian Taxation Office

iv Non-concessional contributions cap | Australian Taxation Office