As Australians prepare for the 2022 financial year, one of the most important decisions they can make is how much to contribute to their superannuation. Superannuation is a government-regulated savings scheme that helps individuals save for their retirement. Making the right decisions now can help to ensure a comfortable retirement in the future. This article will explain how to maximize super contribution in the 2022 financial year and take advantage of lump sum contributions.
Maximizing Super Contributions in 2022
The most important way to maximize your super contributions in 2022 is to take full advantage of the available contribution caps. The contribution caps for the 2022 financial year are as follows:
• Concessional contributions (before tax): $25,000
• Non-concessional contributions (after tax): $110,000
The concessional contribution cap is the limit on the amount of money that can be contributed to superannuation before tax. This includes contributions made by employers, salary sacrifice contributions and personal contributions claimed as a tax deduction. The non-concessional contribution cap is the limit on the amount of money that can be contributed to superannuation after tax. This includes personal contributions and spousal contributions.
It is important to note that if you exceed the contribution cap you may be liable for additional tax. Therefore, it is important to ensure that you do not exceed your contribution caps.
Taking Advantage of Lump Sum Contributions
In addition to taking full advantage of the contribution caps, individuals can also take advantage of lump sum contributions. A lump sum contribution is a single contribution that is made in one financial year. It is important to note that the contribution cap applies to the total amount of contributions made in a financial year, not just a single lump sum contribution.
If you are able to make a lump sum contribution in the 2022 financial year, it can be a great way to maximize your super contributions. For example, if you have a large sum of money that you would like to contribute to your superannuation, it can be beneficial to make a single lump sum contribution instead of making smaller contributions throughout the year.
Making a lump sum contribution in the 2022 financial year can also help to reduce the amount of tax you pay on your superannuation contributions. This is because the concessional contribution cap is applied to the total amount of contributions made in a financial year, not just a single lump sum contribution.
Making the right decisions now can help to ensure a comfortable retirement in the future. Maximizing your super contributions in the 2022 financial year and taking
