EOFY Superannuation strategies 2024
By Luke Kidd
As the Australian financial year comes to an end on the 30th June 2024, it is a good opportunity to review your superannuation strategies and make sure you are planning effectively so as to not miss any opportunities. Here are some of the top things to consider when reviewing your superannuation account at the end of the financial year.
Concessional contributions to super.
As we have explored in previous articles, making salary sacrifice and personal deductible contributions to superannuation can be a highly tax-effective strategy. In 2023/24 the concessional contribution cap is $27,500. If you are seeking to maximise your contributions this financial year, you can consider making an additional personal deductible contribution to top up your super balance in a tax effective manner.
If your Total Superannuation Balance was under $500k on 30 June 2023, you may be able to make concessional contributions more than the usual limit and use any leftover cap amounts from the 2018-19 financial year onwards. You can only carry over unused amounts for 5 years, so this is the final year to take advantage of this 2018-19 benefit.
Reviewing next year’s contributions.
In the 2024/25 financial year, the concessional contribution cap will be increasing to $30,000/pa. This, combined with the lower personal income tax rates may allow many workers to increase their regular salary sacrifice contributions to super. However, the minimum super guarantee payment rate will be increasing to 11.5%. A new financial year is a good time to check your salary sacrifice plan to make sure that you are still on-course.
Government co-contribution
The super co-contribution scheme can help low or middle-income earners boost their retirement savings. Super members who make a personal contribution to super and have an assessable income is below $58,445 may qualify for this scheme. After making a contribution and completing your tax return, the government may also make a co-contribution up to a maximum of $500. The amount of government co-contribution you receive depends on your income and how much you contribute.
Spouse contributions
Spouse contributions allow couples to increase their overall retirement savings and save tax. To obtain a tax offset for an eligible spouse contribution, the receiving spouse’s income must be below $40,000pa. The maximum $540 tax offset is available where the spouse’s income is less than $37,000. To achieve the maximum tax offset this financial year, a spouse contribution of $3,000 would need to be made before 30 June 2024.
Non-concessional contributions.
Making after tax contributions can be an effective way to boost your retirement savings, by transferring proceeds from the sale of an asset, a windfall or accumulated savings. The non-concessional contribution cap in 2023/24 is $110,000 and will be increasing to $120,000 in 2024/25. Super members with a balance below $1.79m will be able to utilise future year caps under the ‘bring forward rule’. Careful planning of these contributions can allow super members to transfer significant sums toward their tax-effective retirement savings.
How we can help
It’s important to note that all the strategies above have specific trade-offs, caps and limits to consider. A financial planner develop strategies to help grow your superannuation account and save for a comfortable and secure retirement. If you or someone you know would like to review their superannuation savings strategies feel free to contact us today.
Luke Kidd is an Authorised Representative of Alliance Wealth Pty Ltd. AR No.1242685