I want to increase my Super, what's the best way of doing that?
This is a common question we get, especially from workers approaching retirement. There are 2 main ways of increasing your super.
- Concessional contributions
- Non-concessional contributions
Below is a brief summary:
- Concessional contributions: These are contributions where the person making the contribution for you claims a tax deduction. So, your boss’s contributions count as concessional, salary sacrifice does too, and so are personal contributions you are claiming a tax deduction for. These contributions, when added together, can’t go over $25,000 per year otherwise you’ll need to pay more tax (boo…). The usual tax rate on $25,000 or less is 15% which is deducted from your super balance. You will see this when looking at your annual super statement.
- Non-concessional contributions: These are contributions that you make personally to your super fund using after tax cash. These contributions are not subject to tax but that means they can’t be claimed as a tax deduction by anyone. The limit here is $100,000 per year or $300,000 over a 3-year period for people under 65 depending on their super balance. There are a few rules based on your age, so it would be best to get advice before you consider this option. If you are on a low income you may qualify for the government co-contribution.
It’s usually a good idea to try and boost your super so you have more when you retire. So now you know a little bit more about what type of contribution you should make.
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Note that the information provided is general in nature and subject to change, please contact one of our professionals who can evaluate your circumstances and provide more accurate advice to your current situation.