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More than half of us set a new financial goal at the beginning of 2025, according to ASIC’s Moneysmart website. While most financial goals include saving money and paying down debts, the months leading up to 30 June provide an opportunity to review your super balance to look at ways 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. Your adviser will know what’s right for you and your situation and has already started to formulate plans as we approach the end of the financial year. Importantly, each year your adviser will guide you to help you make the right contributions at the best time – as getting the timing wrong can have significant implications. Imagine missing out on a $30,000 tax deduction because your contribution was mistimed…
Here are some of the ways your adviser can help you move your super savings in the right direction in the leadup to 30 June:
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).i
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.ii
If you’ve had a break from work or haven’t reached the maximum contributions cap for the past five years, this type of super contribution could help boost your balance – especially if you’ve received a lump sum of money like a work bonus.
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.
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.
There are two ways you can make spouse super contributions, you could:
o 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
o 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.
Your adviser will determine the options available to you and the best approach to take. If you’d like to know more about the strategies we have up our sleeves to help you boost your super before EOFY, don’t hesitate to ask your adviser. And if you know of anyone who might benefit from our expert advice, please encourage them to contact us and we can set up a complimentary initial meeting to kickstart their journey to financial success.
Sources:
i Concessional contributions cap | Australian Taxation Office
ii Non-concessional contributions cap | Australian Taxation Office
Please note, the above information does not constitute financial advice and does not take into account your current circumstances or goals. Please speak with a Financial Adviser before acting on any information found here or throughout the 5 Financial website.