Understanding Key Superannuation Thresholds for the 2024/25 Financial Year

April 12, 2024

Welcome to the latest update on superannuation threholds for the new financial year! As you plan your retirement savings strategy, it’s essential to stay informed about the latest changes that could impact your financial future. Let’s explore the recent updates and what they mean for your super.

1. Concessional Contribution Cap – Boosted to $30,000

Good news! The concessional contribution cap has been raised to $30,000 for the 2024/25 financial year. This increase means you can now turbocharge your retirement savings with additional tax-effective contributions from your employer or through salary sacrifice arrangements.

2. Non-Concessional Contribution Cap – Upgraded to $120,000

You now have more flexibility to grow your super with the non-concessional contribution cap raised to $120,000. This higher limit allows you to make after-tax contributions without worrying about additional tax burdens, empowering you to take control of your retirement nest egg.

3. Bring Forward (Non-Concessional Contribution) Cap – Accelerated to $360,000

Accelerate your retirement savings journey with the enhanced bring-forward provision, now set at $360,000. This provision enables you to make larger contributions over a three-year period, maximizing your super without exceeding the non-concessional contribution cap.

4. Transfer Balance Cap – Steady at $1,900,000

While the transfer balance cap remains unchanged at $1,900,000, it’s crucial to stay within this limit to avoid excess transfer balance tax liabilities when transferring funds into a tax-free retirement phase account.

5. CGT Cap Amount – Increased to $1,780,000

Entrepreneurs rejoice! The capital gains tax (CGT) cap has been adjusted to $1,780,000, offering eligible individuals a tax-effective way to contribute proceeds from the sale of business assets into their super, supporting retirement planning endeavors.

6. Division 293 Tax Threshold – Remaining same at $250,000

The Division 293 tax threshold remains at $250,000, reminding high-income earners to strategize their concessional super contributions to minimize additional tax obligations effectively.

7. Low Rate Cap Amount – Enhanced to $235,000

Unlock favorable tax treatment for your retirement withdrawals with the low rate cap increased to $235,000 for individuals aged 60 and over. This concession allows eligible individuals to access their super benefits with a reduced tax burden, supporting retirement income needs.

8. Preservation Age and Pension Drawdown Rates – Critical Considerations

While not subject to changes this year, remember the preservation age and pension drawdown rates, which dictate when you can access your super and the minimum amount you must withdraw each year.

In conclusion, the updates to superannuation contribution caps and thresholds present exciting opportunities for you to optimize your retirement savings strategy. By leveraging these changes effectively, you can pave the way towards a financially secure retirement. Stay informed, plan strategically, and unlock your super potential!