Reduce Your Tax by Thousands With Unused Concessional Contributions
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Published 2024-06-15
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â± Timestamps
00:00 â Carry Forward Unused Concessional Contributions
01:26 â How Unused Contributions Work
02:31 â When Should You Use Unused Contributions
02:54 â Are You Eligible To Use Unused Contributions?
03:57 â Are You Comfortable Unused Contributions?
04:37 â Optimising Your Unused Contributions
06:51 â When You Shouldnât Use Unused Contributions
07:35 â Case Study Example: How To Use Unused Contributions
13:18 â Things To Be Mindful Of
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Carry-Forward Unused Concessional Contributions Can Save You Thousands
Unused concessional contributions are arguably the most underutilised tax-effective superannuation strategy for people with superannuation balances below $500,000.
Each year, your unused concessional contributions from previous years are carried forward for up to five financial years.
By contributing some or all of your unused amounts to super via salary sacrifice or personal concessional contributions, you can bring your personal income tax down to $0 - saving you tens-of-thousands of dollars each financial year.
In this video, Iâm going to explain how unused contributions work, when you should and shouldnât use them, how to find out your unused amounts and how you can calculate the precise amount you should be using each year.
#SuperGuy #ChrisStrano #Superannuation #RetirementPlanning
DISCLAIMER: The SuperGuy website and SuperGuy YouTube channel contains general advice only. It is not personal advice as it does not take your specific needs or circumstances into consideration. Therefore, you should look at your own financial position, objectives and requirements and seek personal financial advice before making any financial decisions.
General advice is provided by Toro Wealth Pty Ltd trading as SuperGuy Retirement Experts as an Authorised Representative of Core Value FA Pty Ltd (AFSL 480387).
Before acting on any information, you should seek professional advice and verify our interpretation/s before relying on the content or calculators within this website or on the videos, while also considering its appropriateness in relation to your personal situ
All Comments (21)
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Yes, you can carry forward unused concessional contributions to future years.
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I used this strategy last financial year. Asked my accountant to prepare our returns but not lodge. That way I knew exactly how much to notify intent to claim. Bought our income tax down to zero. Of course we had already made non concessional contributions in exess of what was needed. Note that that intent form does not have to lodged before end of financial year. But must be done before lodging tax returns.
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We don't bother going under $45K with deductions for super. The income tax rate is 19% plus medicare levy vs super tax rate of 15%, so only gaining 4-6% or so there for locking up funds until retirement or 65 years or age. However, in the example Anthony is 62 years of age, so there's that. The next financial year 2024-25 the $18,201 to $25,000 income tax bracket is 16%, so only 1-3% benefit there for using this strategy. Each to their own. Good video. Explains it well.
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I did this this year after hearing about it. I put in $68k lost $10200 to the 15% super tax and gained $23k back in income tax so net was $12800 in my favour. I will be doing this next year with a smaller amount.
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At 55 Pity the super concession stops at approx $30k only 10 years till retirement we need to put as much as we can invest take pressure of housing , & invest surplus in super not negative gear property, we can put less pressure on pension
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Excellent, timely video !! Thanks a million Chris !!!
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Working hard to clear my unused amounts. 3 years into a 5 year plan and so far so good. Getting close to limit so before June 30 next year might need to make a bit of a 1 off to clear. After that will drop amount salary sacrificed to try and maximise contribution limit. 59 years old and kids gone so have been able to live off reduced take home pay.
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This is such valuable information so thank you. I am 63 have not worked the past two years due to health issues. I am however looking at using the carry forward super contributions once I secure new employment. Iâm looking at carrying forward the full $55,000 representing the last 2 yearsâ concessional caps. Iâll speak with my super fund tomorrow to get this started
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These are pre-tax contributions to your superannuation fund, which include employer contributions, salary sacrifice arrangements, and personal contributions for which you claim a tax deduction
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I have done this just recently and noticed in my tax account that it is showing as a non concessional contribution. I have found out that it shows as non concessional till you do your tax return claiming the deduction. Was stressing but fingers crossed it will be right. Thanks for the video.
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Great video as always, Chris. I used this strategy to reduce the tax on a large capital gain very effectively.
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If you earn $80,000 how would you have $59,000 available for personal contribution when a cabbage almost costs your entire weekly wage?
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Well covered. Thanks.
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Very informative and the case study was excellent and quite similar to my situation, thanks
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Government should provide co contributions to be honest until you get to 1 mil. It will save them more in long run
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A lot of retirers investors have been victimised by the government by taking a large chuck of their pension. But those who are on a full pension and their investment goes under FAMILY TRUST FUND which their families will "look after the "investment ".
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If under 500k super you can also split up to 85% of your current year of super contributions I believe and Iâm looking at this now. So in the example provided if the male client had a wide with less super he could have done that too to try and stay under the 500k cap and to bolster his wifeâs super.
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I am 32 years old and earn 200k and my concessional contributions are maxed from now on from employer. Balance under 500k. However, 4 of the past 5 years are not maxed. Should I max those before they disappear? ~80k. At this stage, with best estimate forecasting, Iâll be well over the tax free super limit by the time I retire anyway. Is there any real benefit?
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Beware these contributions count towards the $250k threshold of division 293 tax.
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Hi Chris, you say that you can't access your super until retirement or age 65, but I thought you could access up to 10% with a transition to retirement strategy? I was thinking of topping up my super (I'm 57) then drawing down on it when I hit 60 and still working full time, is that possible? Thanks, enjoy your videos
