By making additional super contributions, you can help boost your superannuation balance prior to retirement while at the same time potentially lowering your marginal tax rate. You can choose whether you want to make concessional or non-concessional contributions, or even a combination of both.
How do I maximise my Super balance to plan for a better retirement?
Maximising your superannuation balance can be done using two types of contributions. Both of these contribution types have different caps and rulings. There are annual caps (limits) on the amount of concessional and non-concessional contributions you can make. If you exceed these limits, you’ll be liable to pay extra tax.
Concessional super contributions
Concessional contributions are made from before-tax income and are taxed at 15% in your super fund. They are currently capped at $25,000 per year, unless you are eligible to use the Carry-Forward Rule. The following are types of concessional contributions:
- Compulsory employer superannuation guarantee contributions
- Salary sacrifice arrangements
- Any personal super contributions that you claim as a tax deduction
Non-concessional super contributions
There are two main types of non-concessional (after-tax) contributions – Personal contributions (you make as a superfund member and don’t claim as a tax deduction in your income tax return) and Spouse contributions that are made directly into your spouse’s super account.
They are currently capped at $100,000 per year, unless you are eligible to use the Bring-Forward Rule. The following are types of non-concessional contributions:
- Voluntary additional payments made from your take-home pay
- A contribution made on behalf of your spouse (married or de facto)
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