Key Strategies to Help Boost Your Superannuation in 2025

Whether you're making voluntary contributions, leveraging government incentives, or exploring downsizer contributions, every action you take today can significantly impact your financial future. Explore these strategies for making the most of ways to boost your superannuation.

1. Voluntary Super Contributions

Making voluntary contributions to your super fund can significantly enhance your retirement savings. Whether you choose to contribute pre-tax or after-tax, voluntary contributions allow you to take advantage of compounding returns and tax benefits.

2. Pre-Tax (Concessional) Voluntary Contributions

Pre-tax voluntary contributions, also known as salary sacrifice, allow you to contribute additional funds to your super directly from your salary before tax is applied. Benefits include:

• Tax savings, as concessional contributions are taxed at 15%, which is generally lower than the marginal tax rate.
• Reduced taxable income, potentially lowering your overall tax liability.
• Annual concessional contribution cap of $30,000 (for 2024-25), including employer super contributions.

3. After-Tax (Non-Concessional) Voluntary Contributions

After-tax voluntary contributions, also known as non-concessional contributions, are funds you contribute to your super from your take-home pay or savings. These contributions are beneficial if you:

• Have already reached your concessional contributions cap.
• Want to take advantage of the non-concessional contribution cap of $110,000 per financial year.
• Are eligible to use the bring-forward rule to contribute up to $330,000 over three years if you're under 75.

4. Carry Forward Unused Concessional Contributions

If you haven’t used up your concessional contributions cap in previous years, you may be able to carry forward unused amounts. This is particularly helpful if you:

• Have irregular income and want to boost your super in high-income years.
• Have a total super balance below $500,000 at the end of the previous financial year.
• Want to reduce your taxable income in a year of higher earnings.

5. Make Regular Small Contributions

Contributing small amounts regularly can add up over time and help you maintain a consistent savings habit. Consider setting up automatic payments to your super fund to ensure steady growth and reduce the impact of market volatility.

6. Check the Maximum Super Contribution Caps

Understanding and staying within contribution caps is crucial to avoid excess contribution tax. For 2024-25, the limits are:

• Concessional contributions cap: $30,000 per year.
• Non-concessional contributions cap: $120,000 per year (or $330,000 using the bring-forward rule. Note there are rules that apply when using the bring forward rule.)

Exceeding these caps can result in additional taxes and penalties, so it's essential to plan contributions accordingly.

7. Leverage Employer Super Contribution Rates

Many employers contribute the mandatory Superannuation Guarantee (SG) of 11.5%, (rise of 0.5% came into effect July 2024) this will increase to 12% on 1/7/2025. Check your payment slips to ensure you are receiving the correct amount. If possible, negotiate with your employer for additional contributions or opt for salary sacrifice arrangements to maximize your super benefits.

8. Government Incentives to Boost Your Super

The Australian government offers several incentives to help boost your super savings, including:

The Australian Government's Superannuation Co-contribution Scheme is designed to boost retirement savings for eligible individuals by matching personal after-tax super contributions. For the 2024–2025 financial year, the scheme operates as follows:

• Lower Income Threshold: If your total income is $45,400 or less, you can receive the maximum co-contribution of $500.
• Higher Income Threshold: The co-contribution progressively reduces as your total income approaches $60,400. Once your income reaches or exceeds this amount, you are no longer eligible for the co-contribution.
• There are eligibility criteria which our accountants can advise on.
• Low Income Super Tax Offset (LISTO): If you earn less than $37,000, the government provides up to $500 to offset contributions tax.

9. Spouse Super Contributions

If your spouse earns a low income or is not working, you can make contributions to their super and claim a tax offset of up to $540 if you contribute $3,000 or more. This strategy helps grow your combined retirement savings while reducing your tax liability.  

10. Strategies for SMSF Trustees

Self-Managed Super Funds (SMSFs) provide greater control over your investments. As an SMSF trustee, you can:

• Diversify your investment portfolio to align with your risk tolerance and retirement goals.
• Use concessional and non-concessional contributions strategically to optimize tax benefits.
• Ensure compliance with contribution limits and legal requirements to avoid penalties.

11. Contributions After Retirement

Even after retirement, you can continue to contribute to superannuation under specific conditions:

• If you're under 75, you can make voluntary contributions.
• Downsizer contributions (see below) allow older Australians to add significant sums to their super.

12. Contributions for Ages 67-74

Individuals aged 67-74 can make voluntary contributions if they meet the work test, which requires working at least 40 hours over 30 consecutive days in the financial year. Alternatively, they may qualify for the work test exemption if they meet specific criteria.

13. Downsizer Contributions

If you’re 55 or older and sell your primary residence, you may be eligible to contribute up to $300,000 from the sale proceeds into your super. Downsizer contributions are not subject to the usual contribution caps and can be a powerful tool to boost your super balance in retirement.

At Fincare Accounting, we provide expert advice and personalized strategies to help you grow your super and achieve your retirement goals. Contact us today to discuss ways to improve your superannuation strategy and take control of your financial future.