More Contributions, More Choice!

More contributions and more choice are coming to superannuation from 1 July this year following a series of legislative changes.

Like everything superannuation-related, the changes are complex and involve lots of acronyms. We’ve broken down the main parts below:

Super contributions 

From 1 July, most people can put more of their retirement savings into superannuation.

–  The superannuation guarantee, the mandatory contribution made by your employer, is increasing from 9.5 to 10 per cent. It will continue to rise half a percentage point each year until 1 July 2025, when it will reach 12 per cent.

  –  Concessional (pre-tax) contributions are increasing $2,500, from $25,000 to $27,500 per year. Non-concessional (post-tax) contributions (NCCs) are increasing $10,000, from $100,000 to $110,000 per year. 

  –  Activating the ‘Bring-forward arrangement’ allows contributions of up to three years’ worth of NCCs in a single year. That is increasing alongside the NCC from $300,000 to $330,000.

Those with balances below $500,000 should keep in mind they can carry forward unused concessional contributions from the previous five years, but only as far back as 2018, to make additional concessional contributions.  This can be particularly useful for those on high incomes or who have a potential capital gain during the year from the sale of an asset.  Let’s face it, no one wants to pay more tax than they have to.

But there are limits and those whose balances are already near the limit should seek advice before making contributions, to avoid going over the cap and incurring higher rates of taxation.  

As always, speak with your financial adviser before implementing any action.  

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For more information on your retirement and superannuation investment options, book an appointment with Collective Wealth Advisers.  We tackle today, and tomorrow, together!