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Last chance for $25,000 super deduction

For those with a super balance under $500,000, the 2024 financial year is the final year unused concessional contributions from the 2019 financial year can be applied.

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The concessional contribution limit was $25,000 for the 2018/19 year. If a portion of this limit wasn't used between 1 July 2018 and 30 June 2019, it could be carried forward for a period of 5 years where a super balance was under $500,000. Any contributions leftover from the 2019 financial year must now be used by 30 June 2024, or they will expire and be lost.

If no contributions were made in the 2018/19 year, this year is the final opportunity to add that extra $25,000 to superannuation and claim a tax deduction. If concessional contributions were not made over the past five financial years, an individual may be able to contribute and claim a deduction for up to $157,500.

Using carried-forward concessional contributions can be highly effective in reducing taxable income, particularly in years where income is higher than usual. This could be due to the sale of an investment property, receipt of a bonus or large capital gain from the sale of shares.

Taking this opportunity to catch up on unused contributions can be a worthwhile boost to a super balance.

Take the example of Matt – a professional earning a salary of $190,000 with unused carried forward contributions from the 2018/19 year of $10,000. Matt could make an extra contribution of $16,600 in the 2024 financial year, being the carried forward $10,000 plus the remainder of his current year limit after a super guarantee of $6,600. This contribution would lead to a tax saving of approximately $4,700 (after factoring in the 15% contributions tax), which is a return of 28% on his $16,600 investment.

Maximising deductible contributions in the wealth-building years is crucial to building a strong superannuation balance by retirement and can be tax-effective. When retirement is 15 to 20 years away, it can be hard to see the benefit of locking away savings in superannuation. The benefits of a solid tax deduction and longer-term planning can outweigh these concerns where cash flow allows.

A disciplined contribution strategy should be a key part of the overall wealth plan during the high-income earning years. A high income doesn’t necessarily equate to wealth – rather the ability to save and do something meaningful with those savings to determine wealth.

Superannuation is the most tax-effective place for wealth to be invested in retirement, as earnings are tax-free once a pension is established. Individuals can now have up to $1.9 million in a tax-free pension account (up from the previous limit of $1.7 million). A pension balance of $1.9 million equates to a tax-free income in retirement of $95,000 per year, based on a 5% drawing rate from age 65.

A consistent and tax-effective approach to building one’s super balance will ensure wealth can be built throughout career years in the concessionally-taxed super environment with that wealth being well structured in retirement years.

Tips to make the most of concessional contributions:

  • Check contributions history with your accountant or by checking myGov.
  • Catch up on unused contributions before your super balance exceeds $500,000.
  • Remember to lodge a notice of intent to claim a deduction notice with the super fund.
  • Consider Division 293 tax if personal income is expected to exceed $250,000.
  • Seek advice, as contribution rules are complex.

 

 

 

Lindzi Caputo
24 August 2023
smsfadviser.com

 

 
 
 
 
 

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Hamish Zerbe

Hamish Zerbe

Hamish Zerbe
Financial Adviser / Director

Hamish has been working within the Financial Services industry for over 20 years and has been providing holistic financial advice to clients for over 16 years.

Prior to the establishment of Adelaide Private Wealth in 2014 Hamish worked as a Financial Adviser with one of Australia’s leading Banks after which he worked with many of his existing clients as a Principal in one of Adelaide’s larger Genesys Wealth Advisers businesses.

Over the years Hamish has become a specialist in the areas of portfolio management, personal protection, retirement planning and is an Accredited Direct Equities and SMSF Adviser. He is passionate about partnering with clients to manage their financial affairs effectively, giving them the confidence and time to pursue the lifestyle they wish.

Hamish holds a Diploma of Financial Advice and a Master of Commerce with a major in Financial Planning. He is also a member of the Royal Association of Justices of South Australia Inc and a member of the Association of Financial Advisers (AFA).

Hamish lives in Goodwood with his wife and is a proud father of three young boys. He enjoys playing golf, following AFL, reading and gardening in his spare time.

Ben Newbold

Hamish Zerbe

Ben Newbold
Financial Adviser / Director

Ben has 21 years of experience in the financial planning industry. He has worked for large institutional banks, boutique advice firms and has been delivering holistic advice solutions to clients for more than 19 years.

Ben prides himself on exceeding expectations and providing quality education to his clients around their financial matters, enabling them to make sound and informed decisions.

Ben provides expert and detailed advice in the areas of superannuation, retirement, wealth creation, insurance and Centrelink. He also provides specialist advice in Aged Care strategies to help maximise benefits and minimise aged care fees.

Highly qualified in financial matters Ben holds a Diploma of Financial Planning, a Bachelor of Banking and International Finance and is both an Accredited Direct Equity and SMSF Adviser. He is passionate about using the knowledge he has built up to help clients get to where they want to be.

Outside of work Ben is heavily involved in sport, and is a proud Life Member of both Unley Football Club and Sacred Heart Old Collegians Cricket Club. He enjoys spending any spare time with his wife and chasing after their three children.

Mark Humphris

Hamish Zerbe

Mark Humphris
Financial Adviser / Director

Mark has been involved in the financial services industry for 21 years and has a wide array of experiences that he draws on in giving great advice. Mark believes strongly that personalised advice and guidance together with a very high attention to detail provides clients with the best opportunity to meet their financial and lifestyle goals.

Mark is a strategic thinker and specialises in helping clients initially review and build the right asset and debt structures, before providing detailed advice in the areas of superannuation and investments, cashflow management, family protection and insurances and Centrelink strategies. Mark has had great success in helping people identify and implement opportunities to adjust their cashflow, assets and liabilities to prepare and transition into a great retirement without any financial stresses.

Mark holds a Diploma of Financial Planning, Bachelor of Business (Banking and Finance) and is Listed Security accredited.

When not at work Mark spends time with his young family, enjoys attending sporting events or a quick getaway to the family farm on weekends.

General Advice Disclaimer

Information provided on this website is general in nature and does not constitute financial advice.

Adelaide Private Wealth will endeavour to update the website as needed. However, information can change without notice and Adelaide Private Wealth does not guarantee the accuracy of information on the website, including information provided by third parties, at any particular time.

Every effort has been made to ensure that the information provided is accurate. Individuals must not rely on this information to make a financial or investment decision. Before making any decision, we recommend you consult a financial adviser to take into account your particular investment objectives, financial situation and individual needs.

Adelaide Private Wealth does not give any warranty as to the accuracy, reliability or completeness of information which is contained in this website. Except insofar as any liability under statute cannot be excluded, Count Financial Limited and its employees do not accept any liability for any error or omission on this web site or for any resulting loss or damage suffered by the recipient or any other person.

Unless otherwise specified, copyright of information provided on this website is owned by Count Financial Limited. You may not alter or modify this information in any way, including the removal of this copyright notice.

Terms & Conditions - Hamish Zerbe

This website is operated by Hamish Zerbe & Associates Pty Ltd, ABN 40 573 262482. We are an authorised representative of Count Financial Limited, an Australian Financial Services Licensee. These are the terms and conditions for use of this site and access to the information contained on this site.

  1. We and our authorising licensee:
    1. do not give any warranty or make any representation as to the accuracy, reliability, completeness or security of the information contained on this site and as to changes in circumstances after the date of publication that may impact on the accuracy of the information;
    2. may change and update the information from time to time;
    3. make no representation in relation to, and are not responsible in any way, for the content of any other site you access via this site; and
    4. own the copyright in the information on this site.
  2. Users must not use or reproduce any of the trademarks that appear on this site.
  3. Users of this site must not:
    1. do anything to alter or modify the information on this site;
    2. use the material on this site for any purpose other than as a source of information for personal use unless authorised to the contrary;
    3. distribute, copy or otherwise reproduce in any way any of the material available from this site unless it is expressly authorised;
    4. post any material which is defamatory, in breach of copyright, in breach of the Trade Practices Act or otherwise in any way unlawful or inappropriate.
  4. Users can print a hard copy of material on this site for their personal use only other than material where this is prohibited by a notice to that effect on this site.
  5. The information contained on this site is made available to residents of Australia and its territories and is not intended to be a recommendation, offer or invitation to take up securities or other investments.
  6. We and our authorising licensee are not liable in any way to any person for any loss, damage, cost or expense incurred as a result of the material contained on this site or from unauthorised access to, or any misuse of this site including, without limitation, any negligence by us.
  7. All references on this site to “$” or “dollars” are references to Australian currency unless otherwise stated.
  8. Users of this site agree to indemnify us and our authorising licensee from all liability, cost and expense, (including legal fees) arising directly or indirectly from the use or distribution by any person of material placed on the site by the user or from the alteration, modification of or addition to material on the site by the user.
  9. We and our authorising licensee do not endorse and are not responsible for information, feedback, questions or comments placed on this site by third parties. We can reproduce, use, disclose and distribute the information to others in our absolute discretion.
  10. Links to other sites are provided for your convenience only. Any such links do not constitute or imply endorsement or recommendations of any other company, product or service or any affiliation between us and other organisation (unless otherwise expressly stated).
  11. You consent to us monitoring your use of this site.

Terms & Conditions - Ben Newbold

This website is operated by Ben Newbold & Associates Pty Ltd, ABN 82782076621. We are an authorised representative of Count Financial Limited, an Australian Financial Services Licensee. These are the terms and conditions for use of this site and access to the information contained on this site.

  1. We and our authorising licensee:
    1. do not give any warranty or make any representation as to the accuracy, reliability, completeness or security of the information contained on this site and as to changes in circumstances after the date of publication that may impact on the accuracy of the information;
    2. may change and update the information from time to time;
    3. make no representation in relation to, and are not responsible in any way, for the content of any other site you access via this site; and
    4. own the copyright in the information on this site.
  2. Users must not use or reproduce any of the trademarks that appear on this site.
  3. Users of this site must not:
    1. do anything to alter or modify the information on this site;
    2. use the material on this site for any purpose other than as a source of information for personal use unless authorised to the contrary;
    3. distribute, copy or otherwise reproduce in any way any of the material available from this site unless it is expressly authorised;
    4. post any material which is defamatory, in breach of copyright, in breach of the Trade Practices Act or otherwise in any way unlawful or inappropriate.
  4. Users can print a hard copy of material on this site for their personal use only other than material where this is prohibited by a notice to that effect on this site.
  5. The information contained on this site is made available to residents of Australia and its territories and is not intended to be a recommendation, offer or invitation to take up securities or other investments.
  6. We, our authorising licensee are not liable in any way to any person for any loss, damage, cost or expense incurred as a result of the material contained on this site or from unauthorised access to, or any misuse of this site including, without limitation, any negligence by us.
  7. All references on this site to “$” or “dollars” are references to Australian currency unless otherwise stated.
  8. Users of this site agree to indemnify us and our authorising licensee from all liability, cost and expense, (including legal fees) arising directly or indirectly from the use or distribution by any person of material placed on the site by the user or from the alteration, modification of or addition to material on the site by the user.
  9. We and our authorising licensee do not endorse and are not responsible for information, feedback, questions or comments placed on this site by third parties. We can reproduce, use, disclose and distribute the information to others in our absolute discretion.
  10. Links to other sites are provided for your convenience only. Any such links do not constitute or imply endorsement or recommendations of any other company, product or service or any affiliation between us and other organisation (unless otherwise expressly stated).
  11. You consent to us monitoring your use of this site.

Terms & Conditions - Mark Humphris

This website is operated by Strathmore Nominees Pty Ltd, ABN 65 218 962 870. We are an authorised representative of Count Financial Limited, an Australian Financial Services Licensee. These are the terms and conditions for use of this site and access to the information contained on this site.

  1. We and our authorising licensee:
    1. do not give any warranty or make any representation as to the accuracy, reliability, completeness or security of the information contained on this site and as to changes in circumstances after the date of publication that may impact on the accuracy of the information;
    2. may change and update the information from time to time;
    3. make no representation in relation to, and are not responsible in any way, for the content of any other site you access via this site; and
    4. own the copyright in the information on this site.
  2. Users must not use or reproduce any of the trademarks that appear on this site.
  3. Users of this site must not:
    1. do anything to alter or modify the information on this site;
    2. use the material on this site for any purpose other than as a source of information for personal use unless authorised to the contrary;
    3. distribute, copy or otherwise reproduce in any way any of the material available from this site unless it is expressly authorised;
    4. post any material which is defamatory, in breach of copyright, in breach of the Trade Practices Act or otherwise in any way unlawful or inappropriate.
  4. Users can print a hard copy of material on this site for their personal use only other than material where this is prohibited by a notice to that effect on this site.
  5. The information contained on this site is made available to residents of Australia and its territories and is not intended to be a recommendation, offer or invitation to take up securities or other investments.
  6. We and our authorising licensee are not liable in any way to any person for any loss, damage, cost or expense incurred as a result of the material contained on this site or from unauthorised access to, or any misuse of this site including, without limitation, any negligence by us.
  7. All references on this site to “$” or “dollars” are references to Australian currency unless otherwise stated.
  8. Users of this site agree to indemnify us and our authorising licensee from all liability, cost and expense, (including legal fees) arising directly or indirectly from the use or distribution by any person of material placed on the site by the user or from the alteration, modification of or addition to material on the site by the user.
  9. We and our authorising licensee do not endorse and are not responsible for information, feedback, questions or comments placed on this site by third parties. We can reproduce, use, disclose and distribute the information to others in our absolute discretion.
  10. Links to other sites are provided for your convenience only. Any such links do not constitute or imply endorsement or recommendations of any other company, product or service or any affiliation between us and other organisation (unless otherwise expressly stated).
  11. You consent to us monitoring your use of this site.

Disclosure - Hamish Zerbe

Hamish Zerbe and Hamish Zerbe & Associates Pty Ltd, ABN 40 573 262 482, trading as Adelaide Private Wealth are Authorised Representatives of Count Financial Ltd ABN 19 001 974 625 AFSL No. 227232 which is 85% owned by CountPlus Limited ABN 111 26 990 832 (CountPlus) of Level 8, 1 Chifley Square, Sydney 2000 NSW and 15% owned by Count Member Firm Pty Ltd ACN 633 983 490 of Level 8, 1 Chifley Square, Sydney 2000 NSW. CountPlus is listed on the Australian Stock Exchange. Count Member Firm Pty Ltd is owned by Count Member Firm DT Pty Ltd ACN 633 956 073 which holds the assets under a discretionary trust for certain beneficiaries including potentially some corporate authorised representatives of Count Financial Ltd. The information on this web page is not advice and is intended to provide general information only. It does not take into account your individual needs, objectives or personal circumstances.

Disclosure - Ben Newbold

Ben Newbold and Ben Newbold & Associates Pty Ltd, ABN 82 782 076 621, trading as Adelaide Private Wealth are Authorised Representatives of Count Financial Ltd ABN 19 001 974 625 AFSL No. 227232 which is 85% owned by CountPlus Limited ABN 111 26 990 832 (CountPlus) of Level 8, 1 Chifley Square, Sydney 2000 NSW and 15% owned by Count Member Firm Pty Ltd ACN 633 983 490 of Level 8, 1 Chifley Square, Sydney 2000 NSW. CountPlus is listed on the Australian Stock Exchange. Count Member Firm Pty Ltd is owned by Count Member Firm DT Pty Ltd ACN 633 956 073 which holds the assets under a discretionary trust for certain beneficiaries including potentially some corporate authorised representatives of Count Financial Ltd. The information on this web page is not advice and is intended to provide general information only. It does not take into account your individual needs, objectives or personal circumstances.

Disclosure - Mark Humphris

Mark Humphris and Strathmore Nominees Pty Ltd, ABN 65 218 962 870, trading as Adelaide Private Wealth are Authorised Representatives of Count Financial Ltd ABN 19 001 974 625 AFSL No. 227232 which is 85% owned by CountPlus Limited ABN 111 26 990 832 (CountPlus) of Level 8, 1 Chifley Square, Sydney 2000 NSW and 15% owned by Count Member Firm Pty Ltd ACN 633 983 490 of Level 8, 1 Chifley Square, Sydney 2000 NSW. CountPlus is listed on the Australian Stock Exchange. Count Member Firm Pty Ltd is owned by Count Member Firm DT Pty Ltd ACN 633 956 073 which holds the assets under a discretionary trust for certain beneficiaries including potentially some corporate authorised representatives of Count Financial Ltd. The information on this web page is not advice and is intended to provide general information only. It does not take into account your individual needs, objectives or personal circumstances.