Now that you’ve done some personal calculations and you know if you have a gap between what you’ll have versus what you’ll need, you have the opportunity to fill that gap.
If you’re on track to having a nest egg that would support you in retirement and deliver the lifestyle that you want, congratulations and well done! If you’re not, there are a number of several different options available to help you increase your savings, to support you when you stop work. Here’s an overview of what you can do:
Making the most of your super also includes remembering that there are limits to how much you can contribute to your super each year. If you breach these ‘contribution caps’ you may need to pay extra tax. Your total super balance and age may also affect how much more you can contribute.
It’s important to keep a track of your contributions and be aware of the limits to avoid any unexpected tax implications.
There are different kinds of contributions you can consider. It’s important to understand the difference, as this can impact how much tax you pay. Here’s an overview:
Concessional contribution caps
Concessional contributions are contributions made from your before-tax income, including your compulsory super contributions (also known as super guarantee) and salary sacrifice. It also includes any personal contributions using after-tax income (such as funds transferred from your bank account into super) that you’ve claimed a tax-deduction on. For the 2022-23 financial year, the concessional contribution cap is $27,500 per annum.
Non-concessional contribution caps
Non-concessional contributions are contributions made from your after-tax income and aren’t taxed once received by your super fund. However, if you exceed your non-concessional caps you may need to pay extra tax. Also note, investment earnings in the fund are taxed at 15 per cent. For the 2022-23 financial year, the non-concessional contribution cap is $110,000 per annum. This cap might be higher, if you can use the bring-forward arrangements.
Wrap up
Superannuation can be a complex arena, so it’s important to make sure you’re comfortable in the knowledge that you know which contribution option is best for you. If at any time you’re unsure, it’s good to reach out to your super fund who can provide you with general information. If you want specific information relevant to your particular situation, speak to your financial planner. If you don’t have a financial planner, reach out to the Financial Advice Association Australia who as an independent body, can help put you in contact with one.
This article was previously prepared and published by AIA Australia Limited ABN 79 004 837 861 (AIA Australia) prior to Resolution Life’s acquisition of AIA Australia’s Superannuation & Investment life insurance on 1 July 2023.
Now that you’ve done some personal calculations and you know if you have a gap between what you’ll have versus what you’ll need, you have the opportunity to fill that gap.
If you’re on track to having a nest egg that would support you in retirement and deliver the lifestyle that you want, congratulations and well done! If you’re not, there are a number of several different options available to help you increase your savings, to support you when you stop work. Here’s an overview of what you can do:
Making the most of your super also includes remembering that there are limits to how much you can contribute to your super each year. If you breach these ‘contribution caps’ you may need to pay extra tax. Your total super balance and age may also affect how much more you can contribute.
It’s important to keep a track of your contributions and be aware of the limits to avoid any unexpected tax implications.
There are different kinds of contributions you can consider. It’s important to understand the difference, as this can impact how much tax you pay. Here’s an overview:
Concessional contribution caps
Concessional contributions are contributions made from your before-tax income, including your compulsory super contributions (also known as super guarantee) and salary sacrifice. It also includes any personal contributions using after-tax income (such as funds transferred from your bank account into super) that you’ve claimed a tax-deduction on. For the 2022-23 financial year, the concessional contribution cap is $27,500 per annum.
Non-concessional contribution caps
Non-concessional contributions are contributions made from your after-tax income and aren’t taxed once received by your super fund. However, if you exceed your non-concessional caps you may need to pay extra tax. Also note, investment earnings in the fund are taxed at 15 per cent. For the 2022-23 financial year, the non-concessional contribution cap is $110,000 per annum. This cap might be higher, if you can use the bring-forward arrangements.
Wrap up
Superannuation can be a complex arena, so it’s important to make sure you’re comfortable in the knowledge that you know which contribution option is best for you. If at any time you’re unsure, it’s good to reach out to your super fund who can provide you with general information. If you want specific information relevant to your particular situation, speak to your financial planner. If you don’t have a financial planner, reach out to the Financial Advice Association Australia who as an independent body, can help put you in contact with one.
This article was previously prepared and published by AIA Australia Limited ABN 79 004 837 861 (AIA Australia) prior to Resolution Life’s acquisition of AIA Australia’s Superannuation & Investment life insurance on 1 July 2023.