Your Superannuation Check-in before the end of the financial year
The end of financial year is again upon us. Although only a few weeks away, there is still enough time to do a quick superannuation check-in. Before everything resets for the new year.
To assist, here are a few things to keep in mind when doing your review:
There are many ways to make contributions into your superannuation, as set out in our article: “Super – are you putting the most in to get the most out?”.
As we approach the end of financial year, making certain contributions before 30 June becomes more time-critical as we seek to claim tax deductions or qualify for payments. Examples of such are Spouse Contributions, Personal Deductible Contributions and eligibility for Government Co-Contributions.
Concessional Contributions Cap (CCC)
When was the last time you reviewed your CCC? This is the maximum you can contribute pre-tax to your super in any one year. For financial year 30 June 2021, your concessional cap is $25,000. From next year it increases to $27,500.
It is important to review your CCC as exceeding it can attract additional taxation on the excess contributed amount. Just as importantly, if you can, you don’t want to waste your ability to put more money in the tax-effective superannuation environment.
There are instances where your cap may be higher and that is where you haven’t used all your CCC in previous years, and is our final point of your review.
Carry Forward Concessional Contributions
If you don’t use all your Concessional Contributions Cap in one year, the remaining balance will be carried forward. You can carry forward any unused cap for up to 5 years. This arrangement commenced in 2018-2019 so any unused cap since then would be available to use.
For those who have been out of work, or maybe sole traders who haven’t made contributions to superannuation, this may be a good opportunity to boost your super.
There are some rules around using your carry forward balance, so it is best to seek professional advice before doing so.
You can view your current carried forward balance on your mygov account (www.my.gov.au).
The end of financial year is a good time to assess not only your superannuation but your total financial position -time to review your strategies and portfolios and make tweaks where needed. Should you need some assistance in your review a no-obligation meeting with Louella Jorge at Discovery Wealth Advisers.
The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice Group’s position and are not to be attributed to RI Advice Group. They cannot be reproduced in any form without the express written consent of the author. Louella Jorge is an Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429. This editorial does not consider your personal circumstances and is general advice only. It has been prepared without taking into account any of your individual objectives, financial solutions or needs. Before acting on this information, you should consider its appropriateness, having regard to your own objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser before you act