Make the Most of Superannuation Growth Strategies in 2022

There are many strategies you can use to grow your superannuation balance and make the most of available schemes. Here are some strategies to consider when planning for the end of this financial year and setting up your financial plans for next year.

• First home super saver scheme – this allows you to save money for your first home within your superannuation fund by making voluntary contributions into your super fund. The concessional tax treatment of super benefits individuals saving for a first home and helps you to save faster. If you’re eligible, you can apply to release your voluntary contributions and related earnings to put towards your first home deposit.

• Work test changes – if you’re aged between 67 and 75 years old and still working, you can make salary sacrifice contributions without having to meet the work test.

• Downsizer contributions – eligible individuals aged 60 and over can make contributions to super from the proceeds of selling your home. This allows an individual or couple to add significantly to your super fund. If you’ve sold a business, you may also be able to take advantage of this rule to contribute proceeds of business asset sales into super.

• Transfer balance cap – this is a lifetime limit on the total amount of super that can be transferred into retirement income such as pensions. The maximum for 2022 is $1.7 million, depending on when the retirement phase income stream starts. This can be useful to consider when one member of a couple has reached their personal transfer balance cap.

• Total super balance – your total super balance may be different from the actual super fund account balance on 30 June. Your total super balance each year determines whether you are eligible for certain super measures in the following financial year.

• Extra contributions – you can put extra money into your super fund from pre-tax earnings with a salary sacrifice arrangement with your employer or add additional funds from your post-tax earnings. Pre-tax contributions are called concessional contributions and are taxed at a flat rate of 15%. Post-tax contributions are called non-concessional contributions and are not taxed in your super fund. There are caps on the amount you can add to your fund for both types.

• Carry forward rule – you can make extra concessional contributions without paying extra tax if you have not contributed the maximum concessional amount in previous years.

Talk to us if you'd like to discuss tactics for increasing your super and making the most of allowable schemes. Contributing extra funds to super is generally beneficial, but certain thresholds must be observed to avoid additional tax, and some of the new rules don't start until July 2022.

Check the ATO Growing your super information to learn about available possibilities.

We can help work out a customised plan for your situation to reap the benefits of strategic super planning for 2022 and beyond.