Non-concessional contributions: What are they and who can make them?
If you’ve been looking at your retirement savings, then chances are you’re already familiar with your super account. You would know that your employer makes regular contributions, but did you know that such contributions are taxed at a special rate of 15 per cent? This is because they are concessionally taxed.
Fifteen percent is a pretty low rate. However, you can take some of your own earnings (which have already been taxed at the normal rate) and deposit them in your super account at no additional tax. This is called a non-concessional (or after-tax) super contribution, and it’s a great way to make sure you’re setting aside a little extra for when you retire.
An extra bit of padding can go a long way
With people working longer and retiring later, your super account is not something you can afford to ignore. Even if you only make a small contribution out of every paycheck, or a small lump sum at the end of each year, it can go a long way to boosting your numbers.
However, when it comes to making non-concessional contributions to a super account, there are really only two main people who are allowed to make them (and sometimes only one person).
The first, and by far the most common, is when you put money into your super account for yourself. You get to choose when and how much, and you get the added peace of mind, knowing you will have sufficient funds to help you live the way you want after retirement.
The second is when your spouse makes contributions to your super. This is typically a way to help bring equilibrium to your retirement accounts, and to make sure you’re both saving enough for when it’s finally time to say goodbye to that time clock.
There are dozens of reasons for making non-concessional contributions to your super fund. For more information about how you can help yourself to save more for your retirement, simply contact us today.