there's a number of changes to the super uation rules coming up from the 1st of July 2024 that could have a big impact on how you plan for retirement in this video I'm going to go through the three main changes coming up from the 1st of July in detail compare them against the current rules and explain what you can do to take advantage of these changes plus if you stick around to the end I'm going to give you a quick reference guide that I've built that gives you details on all of the main changes to Super inovation limits and thresholds coming up for the 2024 Financial year so hang around for that hey there I'm Chris tro the founder of super guy I'm also managing partner of retirement planning firm Toro wealth where we specialize in providing retirement planning advice for 50 to 70 year olds if you're new here make sure you click that subscribe button and hit the notifications Bell so that you get notified each time I release a new video as always this is general advice only and does not constitute Financial advice so please read the disclaimer found in the description below all right let's get stuck in for the first time since July 2021 the Australian government has raised contribution caps for superation both the concessional and non-concessional contribution limits have increased allowing you to put more of your money into Super additionally there are changes to the carry forward and bring forward rules as well as an increase to the employer superation guarantee rate meaning your boss if you have one will need to pay you more so right now we're going to go through the specific changes relating to the concessional contribution limits and these are the deductible contributions made to Super the non-concessional contribution limits these are after tax contributions made to supera and the super uation guarantee rates these are the mandatory super contributions your employer must pay into your super fund firstly concessional contributions so as we know concessional contributions include salary sacrifice contributions personal deductible contributions and employer SG contributions each year the combined amount of these contributions will count towards What's called the concessional contribution cap and this cap signifies the maximum am that can be contributed as a concessional contribution in any One Financial year as of 1 of July 2024 this cap is increasing from 27,500 per person per Financial year to $30,000 per person per Financial year meaning an extra $2,500 can be contributed each year under this cap amount there are also some changes happening to the carry forward unused cap rules that relate to concessional contributions now this may get a little bit tricky for some of you but bear with me so as we've explained exped there is an annual concessional contribution cap however if you have a super balance of less than $500,000 on the most recent 30th of June you can add up any portions of the cap and use the unused amounts in The Current financial Year from the previous five Financial years that you did not use for example if your super balance was $400,000 on the 30th of June 2024 then in the 2425 Financial year you could utilize any unused portions of your cap amounts from the previous 5 years now importantly this Rule and the unused amounts only began acre from the 20189 financial year meaning that this is the first time that the first year will drop off what I mean by this is that as of the 1st of July 2024 you will no longer be able to use the unused portion of your cap from the 201819 financial year because that will have been 6 years ago so if you're going to use the unused amounts from that year it needs to be used before 30th of June 2024 keep in mind that to use it in the current 23 24 Financial year you have to have had a total super balance below $500,000 on the 30th of June 2023 and you had to have used up all your current year General cap of 27,500 if you want to know the total amount of concessional contributions you have made to Super this year and previous years as well as your ability to use the unused contributions you can log into your my account and click on the super ination tab you may also be able to ask your super fund but keep in mind that their figures may not give you the full picture if you have had more than one super fund or have changed super funds over the past 5 years okay moving on next up non-concessional contributions non-concessional contributions are contributions made to superation with after tax money and what I mean by after tax money is money that you have already paid income tax on like a wage from your employer that is now sitting in your personal bank account and for it to be a non-concessional contribution you cannot claim a a personal tax deduction for it so each year you are limited to the amount of non-concessional contributions that can be made into your super account the annual cap is known as the general non-concessional contribution cap the general annual cap is always equal to four times the value of the concessional contribution cap therefore as of 1st of July 2024 this cap is increasing from 110,000 per person per Financial year to 120,000 per person per Financial year meaning an extra $10,000 can be contributed each year under this cap amount remember this cap is in addition to the concessional contribution cap there are also some changes happening to the bring forward rules that relate to the non-concessional contributions again this may get a little bit tricky for some of you but bear with me again so just like concessional contributions there is an annual cap for non-concessional contributions however you are able to bring forward up to an two additional years worth of the cap which allows you to contribute up to 3 years worth of the cap amount at any point over a 3year period with no regard to the annual cap for example based on the current annual cap amount of $110,000 you can contribute $330,000 as a one-off contribution in this financial year and then no more non-concessional contributions for the next two Financial years or you might contribute say $200,000 now and $130,000 next financial year but no more than $330,000 over 3 Financial years once the bring forward rule has been triggered the bring forward rule is only triggered and the 3-year period only begins in the financial year that you first exceed the general cap amount now here's why there are a couple of changes to be very mindful of because the general non-concessional cap is increasing from 110,000 to 120,000 the total bring forward rule amount will increase from 330,000 to 360,000 however don't get caught out because if you trigger the bring forward rule prior to 30 of June 2024 you will only be able to contribute up to $330,000 in total under the bring forward Arrangements you do not get to bring forward the increased $120,000 General annual cap amounts whereas if you trigger the bring forward rule after the first of July 2024 you can get the full 360,000 make sense therefore if you're looking at contributing large amounts to Super you may consider just doing 110,000 this financial year and then up to $360,000 next financial year but you should definitely seek advice from your financial adviser or accountant around this again if you want to know the total amount of non-concessional contributions you have made into Super this year and whether or not you have uh triggered the bring forward rule in previous years you can log into your myv account and click on the ATO Tab and then Super ination Tab and follow the breadcrumbs another thing to be mindful of for those of you with large balances the total super balanc thresholds for non-concessional contribution eligibility will also be changing specifically from 1st of July 2024 if your total super balance is between 1.78 million and 1.9 million the maximum non-concessional contribution you can make is 120,000 if between 1.66 million and 1.78 million it is 240,000 using the bring forward Rule and if less than 1.66 million you can contribute up to the maximum of 360,000 using the bring forward Ru all right before we get to the bonuses that I promised you we're going to quickly cover off on the final change coming up on what will affect a lot of people these are SG contributions superation guarantee contributions are contributions that your employer must make into your super account on your behalf the super ination guarantee contribution rate is partway through its progressional increase from 9% perom to 12% perom on the 1st of July 2024 it will increase from the current rate of 11% per anom to the new rate of of 11.5% this means if you earn say 80,000 per year your employer will need to increase your compulsory super contributions from 8,800 per year up to 9,200 per year importantly this may require some changes to any salary sacrifice Arrangements you have in place to maybe increase or decrease your salary sacrifice amount based on increases to your employer contributions and an increase to the contribution cap I would strongly suggest seeking Financial advice to optimize your contribution strategy or discussing this with your accountant all right we have covered a lot and I did promise to give you a quick reference guide to all of the changes coming up plus more so head over to superg guide.com do/ Changers and here you'll find a guide to most of the relevant facts and figures and how they will be changing from the 1st of July 2024 I hope you get some value from this video if you did remember to click the thumbs up button to show that you liked it and their subscribe button for more content for even more tips head over to superg guy.com Au And subscribe to my newsletter for regular tips it's free
