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Maximising Your Retirement Savings Before June 30th with Extra Super Contributions


Retirement savings growing

As the end of the financial year approaches, it's essential to consider ways to maximise your retirement savings. Making extra contributions to your super is one of the most effective ways. In this post, we'll explain why additional contributions to your super are essential, how to make them, and some other options to consider before the end of the financial year.


Maximising Super Contributions: Why Extra Contributions to Your Super Are Important


Maximising super contributions can help you achieve a comfortable retirement by increasing your retirement savings. By contributing more to your super, you can take advantage of the benefits of compounding interest, which means your money will grow faster over time.

In addition, making extra contributions to your super can provide tax benefits. Concessional contributions (i.e., contributions made before tax) may be taxed lower than your income tax rate, which can help reduce your overall tax bill. Non-concessional contributions (i.e., contributions made after tax) are tax-free.

How to Make Extra Contributions to Your Super

There are several ways to make extra contributions to your super:

Salary Sacrifice

If your employer offers a salary sacrifice arrangement, you can arrange to have a portion of your pre-tax salary paid into your super account. This is a tax-effective way to boost your super balance.

Personal Contributions

You can also contribute to your super as an individual. If you claim a tax deduction, these contributions are counted as concessional contributions; if you do not, these contributions are counted as non-concessional contributions.

Spouse Contributions

If your spouse is not working or has a low income, you can contribute to their super account on their behalf. These contributions may be eligible for a tax offset. It's important to note that there are contribution limits when making extra contributions to your super. These limits are known as super contribution caps and vary depending on age and other factors. For the 2022-23 financial year, the superannuation contribution caps are as follows:

  • The concessional contribution cap is $27,500, and the non-concessional contribution cap is $110,000 annually.

If you have more than one super fund, all contributions made to all of your funds are added together and counted towards your contribution caps. It’s essential to seek professional advice to determine the best way of contributing your funds to superannuation.

Other Options to Consider Before the End of the Financial Year

In addition to making extra contributions to your super, there are other options to consider before the end of the financial year:

Pre-pay Expenses

Suppose you have any deductible expenses, such as insurance premiums or investment property expenses. Pre-paying them before June 30th may allow you to claim a tax deduction in the current financial year.

Downsizer Contributions

Another option to boost your retirement savings is to consider downsizing your home. If you're over 55 and sell your principal residence, you may be eligible to make a downsizer contribution to your super of up to $300,000 per person. This contribution doesn't count towards your super caps and can be tax-effective to boost your retirement savings.

It's important to note that downsizer contributions have specific eligibility criteria, and it's essential to seek professional advice to determine if this option suits your situation.

Maximising your retirement savings before the end of the financial year can provide significant benefits in compounding interest and tax benefits. Making extra contributions to your super is a great way to achieve this. Consider the contribution limits and circumstances when deciding how much to contribute.

In addition to making extra contributions to your super, pre-paying expenses and downsizing your home can also be effective ways to boost your retirement savings. However, seeking professional advice before making any decisions is important to ensure they suit your situation.

At Middleton Financial Planning, we can help you navigate the complexities of superannuation and retirement planning. Contact us today to learn what's possible for your situation and how we can help you maximise your retirement savings before the end of the financial year.

Remember, the end of the financial year is quickly approaching, so don't delay taking action to boost your retirement savings. You can take steps towards a more comfortable retirement with the right strategies and professional advice.

Disclosure Statement: Middleton Financial Planning Pty Ltd ABN 91 166 322 318 is a Corporate Authorised Representative of Matrix Planning Solutions Ltd (ABN 45 087 470 200 | AFSL 238256). General Advice Warning: This information is of a general nature only and has been prepared without taking into account your particular financial needs, circumstances and objectives. While every effort has been made to ensure the accuracy of the information, it is not guaranteed. You should obtain professional advice before acting on the information contained in this publication. You should read the Product Disclosure Statement (PDS) before making a decision about a product.

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