There are some big changes to the superannuation rules from the 1st of July 2024 that will have a big impact on how you plan for your retirement.
From this date, there will be opportunities to put more of your money into super with both concessional and non-concessional caps increasing.
Concessional and non-concessional caps
On 1 July 2024, the concessional contribution cap is increasing from $27,000 to $30,000 per person and per financial year.
Unused carry-forward contribution amounts will drop off. What does this mean? Any unused portions of the concessional contribution cap from the 2018/2019 financial year will no longer be available as of 1 July 2024. Why? Because unused cap amounts can only be carried forward for 5 year.
Tip: If you have unused concessional contributions from the 2018/2019 period that you are eligible to use, consider take advantage of these. If you don’t, they will be forfeited as of 1 July 2024.
Superannuation Guarantee Contributions
Like the incremental increases in the mandatory employer contributions, the Super Guarantee rate will be increasing from 11% to 11.5% from the 1st of July 2024
This means that your employer, if you have one, will need to contribute more into your super account.
Tip: While an increase in the general concessional contribution cap could allow you to salary sacrifice more into your super, you should be mindful of the increase in the Super Guarantee rate which will also influence how much you can salary sacrifice.
Non-Concessional Contribution Cap
On 1 July 2024, the non-concessional contribution cap will be increasing from $110,000 per person and per financial year, to $120,000.
What that means is that the bring-forward arrangements will allow you to contribute up to $360,000 over a three-financial year period with no regard to the annual cap (providing that the bring-forward rule is triggered after 1 July 2024.)
Tip: If you are thinking about making a large non-concessional contribution before 30 June 2024, maybe hold off. Consider waiting until after 1 July 2024. This will give you access to a $360,000 bring-forward cap rather than a $330,000 bring forward cap.
So there is lots of change coming! If you would like to book an appointment to discuss your retirement planning, click on the link below:
