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What Superannuation Rules Apply at My Age?
How much you add to your super could be the difference between a comfortable retirement and one where you worry about running out of money.
However, depending on your age, there are limitations on how much you can contribute to your superannuation balance.
The age restrictions and kinds of super contributions you made may have altered many times in recent years. The good news is as more Australians retire every day, the age criteria for making super contributions are becoming more flexible.
While contributing to superannuation provides tax benefits and enables you to build your retirement nest egg, keep in mind that such contributions are not available until you satisfy a superannuation condition of release.
In general, you will be eligible to receive your superannuation benefits for the first time after reaching your superannuation preservation age and meeting the superannuation criteria of retirement.
However, if you reach your preservation age while still working, you may have restricted access to your assets by commencing a transition to retirement plan.
Super Contributions Under Age 67
Those under the age of 67 are not restricted in the kind of contributions they can make to their superannuation account.
A person under the age of 67 is only limited by the relevant contribution restrictions and cannot contribute if their entire superannuation balance exceeds the transfer balance maximum.
If you fall in this age bracket, you will be eligible to make:
- Employer contributions
- Salary sacrifice contributions
- Personal deductible (Concessional) contributions
- After-tax (Non-Concessional) contributions
- Spouse contributions
Super Contributions Aged Between 67 and 74
In this age bracket, your employer is free to make mandatory employer Superannuation Guarantee payments to your superannuation account. However, the work requirement must be satisfied to make other contributions such as salary sacrifice contributions, self-employed contributions, personal non-concessional contributions, and spouse contributions.
Furthermore, the work test must be fulfilled throughout the financial year in which the contribution is made and previous to your contribution.
When it comes to spouse contributions, the receiving spouse must also satisfy the employment requirement.
Recent retirees aged 67–74 may make non-concessional super contributions by 1) fulfilling the work test requirements, or 2) for a period of 12 months from the end of the financial year in which they last met the work test if their superannuation balance is less than $300,000 (one-time only).
Super Contributions Aged 75+
At this age, the only contributions that a superannuation fund may receive on behalf of a member are employer SG payments or award contributions, both of which are unrestricted.
Contributions from home downsizers are also allowed but any other kinds of donations cannot be made or accepted.
Work Test Super Contributions Over Age 67
To make or receive super personal contributions beyond the age of 67 (but under the age of 75), you must generally satisfy the superannuation work test. Unless the work test exemption is met, the work test is defined as working at least 40 hours over 30 days in the fiscal year the contribution is made and before the contribution is made.
Bonus Tip: Downsizer Contributions
If you cannot satisfy the employment test or work test exemption requirements, there is another option to increase your super account – make a downsizer contribution. If you are 65 or older, you may make a downsizer contribution of up to $300,000 into your super account using the proceeds from the sale of your property.
Couples may contribute up to a total of $600,000 to their super accounts if both spouses make a downsizer contribution.
Regardless of your employment position or previous super contributions, you may make a downsizer contribution. There is no upper age restriction for making a downsizer donation at the moment. Downsizer contributions are not tax-deductible and do not count towards your average annual non-concessional contributions cap.
Do You Need Superannuation Advice in Port Macquarie?
If you need reliable superannuation advisers in Australia, Coastal Advice Port Macquarie can help! Our financial specialists can advise you with superannuation advice and retirement plans so you can look forward to your golden years.
Contact us and book a complimentary meeting with our independent financial advisers today!
DISCLAIMER: 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. This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice. Newcastle Financial Planning Group, Central Coast Financial Planning Group, Sydney Wealth Advisers, Coastal Advice Port Macquarie and Coastal Advice Ballina Byron are subsidiaries of Coastal Advice Group Pty Ltd which is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.