Maximize Your Tax Savings with a Strategic Superannuation Contribution

In the current financial landscape, it’s essential to make smart financial decisions to optimize your tax savings and enhance your retirement savings. At Leading Advice, we recommend making a strategic personal deductible contribution to your superannuation fund. Here’s how you can take advantage of the carry-forward concessional contribution rule to save on taxes and build your retirement nest egg.

Case Study: Contribute $49,424 to your super fund

We suggest contributing $49,424 to your superannuation fund. This amount utilizes the carry-forward concessional contribution rule, allowing you to use the unused contribution limit of $33,497 from the previous four financial years (up to 2022-23) and the remaining contribution limit of $15,927 from the current financial year (2023-24). This approach is particularly effective if you’ve received a redundancy payment, helping you minimize your tax liability.

(Disclaimer: The recommended strategy is just an example. Please consult a financial adviser to tailor it to your personal circumstances.)

Here’s a comparative analysis of your financial situation with and without the recommended concessional contribution

 

Category No Additional Concessional Contribution Recommended Concessional Contribution
Assessable Income $183,066 $183,066
Other Income (Rental Income) $28,860 $28,860
Less Concessional Contributions &49, 424
Taxable Income $211,926 $162,502
Less Estimated Income Tax Total (including Medicare Levy) $70,272 $48,442
Total After Tax income $141,654 $114,060
Total Income Tax saved $27,594
Less 15% Contributions Tax on Additional Concessional Contribution $7,414
Total Net Tax saved (2023-24) $20,180

Benefits of This Strategy

Long-Term Retirement Savings: Your primary long-term objective is to build your retirement savings. Making additional contributions significantly contributes to this goal.

Maximize Tax Deductions: By making a catch-up contribution of $49,424, you maximize your tax deduction for the year. This reduces your taxable income and the overall tax payable.

Boost Wealth Accumulation: The tax deduction is expected to lower your tax payable by an estimated $24,958, due to the favourable tax treatment of these contributions in the superannuation fund. This strategy boosts your overall wealth accumulation.

Catch-Up Contributions: Since your super balance is currently below $500,000, you can make catch-up concessional contributions from the financial year 2022-23. This allows you to utilize the unused portion of your annual concessional contribution cap for up to five previous financial years.

Conclusion

Making a strategic personal deductible contribution of $49,424 to your HUB24 superannuation fund is a powerful way to reduce your tax liability and enhance your retirement savings. At Leading Advice202, we are committed to helping you achieve your financial goals. Consult with us to ensure this approach aligns with your financial objectives and to maximize the tax benefits available to you.

Start planning today for a more secure financial future!

Disclaimer: The recommended strategy is just an example. Please consult a financial adviser to tailor it to your personal circumstances.

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