What Are Non-Concessional Contributions & Are They Worth It?

[@SuperGuyAu]

Hey everyone, thanks for watching! Ready to take control of your retirement? Download our FREE 6-Step Superannuation Check today: www.superguy.com.au/super-tips/

[@Andrew-cp7mc]

Thanks Chris - helpful and easier to digest than reading off your website!

[@SuperGuyAu]

Glad it was!

[@HanozK]

I second that!! Really helpful video.

[@laurellemorris7654]

Thanks so much for your videos - have been really helpful!

[@CallsignEskimo-l3o]

The Re-contribution Strategy is particularly effective as a estate planning tool. By increasing the proportion of the tax free component of your superannuation, you can increase the sum paid to your beneficiaries, particularly if they are adult children. Though, this can mean transferring you entire superannuation into a new fund via Non-Concessional Contributions to avoid any amount of the funds being treated as Tax Payable.

[@SuperGuyAu]

Yes, a strategy that many people aren't aware of.

[@waynev5097]

I have never heard of the recontribution strategy. Is this a way of avoiding g the 15% tax paid by beneficiaries on funds received from an inheritance out of an estates super account. Is the recontribution strategy restricted by the annual contribution cap?

[@JustJamesDean]

great video. I also recently found out, there is a brought forward provision, up to 330k NCC. Its awesome

[@SuperGuyAu]

It is!

[@peterschurr8087]

There was a time only a few years ago when Super performance was better than paying down a home mortgage. Even now, at 6.5% for mortgages, it’s still line ball whether non-concessional actually bring you out ahead at some point in the future.

[@SuperGuyAu]

There's no right or wrong approach, just pros and cons of each.

[@oodleyboo]

Thank you for the video

[@SuperGuyAu]

You're welcome!

[@garyhaigh1454]

Thank Chris. Great video. Can non-concessional contributions be back-dated in a similar fashion to concessional contributions (given the 5 year time frame and maximum limits to concessional contributions)?

[@niroshaabeysundara1713]

Thanks Chris. Great explaination.

[@salaparwak8464]

thank Chris, very informative.

[@deborahvella2323]

Thanks

[@SuperGuyAu]

No problem

[@fieldsofgold775]

As always thanks Chris.

[@josephyeo6966]

A question I hope someone can answer here. I am over 65 and still working. I made a concessional contribution up to the cap allowed, and then put in a claim for tax deduction. What happens if I then withdraw the said amount, or roll it over into my pension account, within the same financial year?

[@SuperGuyAu]

It's generally okay, provided your super fund has formally acknowledged that they know you will be claiming a tax deduction in respect of the contribution. Speak to them first to confirm this.

[@josephyeo6966]

@@SuperGuyAuYes the fund has acknowledged. Seems like cheating when I put in and then wiithdraw. Thanks for your help.

[@josephj6521]

Fantastic video. Here I was thinking I’ll get a tax deduction. My super fund couldn’t answer that simple question.

[@fcuksigningup]

G’day Chris, great videos! I was wondering if you have one (or will do one) specifically on bring forward arrangements? Cheers, Charli

[@khuti007]

Thx Chris. I started a TTR end of April (Like right now). So i wanted a $1000/ftn. But super is going to pay me $5100 ftn I assume because $1000ftn over the entire previous 12mths !! And there is only 5 ftn left in this year. So Im going to non concessional it back in till end of this financial year.

[@SuperGuyAu]

You should check which box you ticked on the application. A pro-rata option should have reduced the annualised amount and saved you having to recontribute.

[@khuti007]

@@SuperGuyAu Thanks mate. What Ive done, after a bit more thought. Ill keep this money and use it till the EOFY. Ill reduce my income to the minimum untill then. Do you have a video on actually changing Super companies...whats involved, pros and cons? Any again thanks for your help love this channel.

[@mkefiro]

Would you recommend parking non confessional contributions in a separate super fund, as some do? Also, I hope you can make a video comparison of funds offering ETFs .

[@thevalayshah]

Can someone help me to understand.. you get charged 15% contribution tax when your employer make contribution and how much do they take out as tax when you reach retirement and pull out money

[@SuperGuyAu]

Nil, if aged 60 or over.

[@pines3200]

Hi Chris. Thanks for your excellent videos. I've got a lot of catch-up concessionals to tip in this year. I'm fairly sure of the figure but dont want to go short - or add too much. There is talk about the ability to withdraw amounts free of penalty if over contribution occurs, but I've never seen anything about how this could occur (if indeed it is accurate).. Are you able to fill this in please? Many thanks

[@SuperGuyAu]

If you exceed the cap you will get a notification of excess contributions and the ability to withdraw the excess.

[@martinp21000]

Great vid and insight. I’m 48 and seriously considering squirrelling away all spare cash for tax advantages as on high marginal and with stock investing outside of super will have large CGT if it goes well! I have an emergency fund so feel like it’s best use of money for my time of life and so I don’t have to scrimp in retirement. And if I go, wife and kids are cared for financially. Does this all sound rational (not asking for advice ;))

[@SuperGuyAu]

The main benefit of making additional contributions to super is concessional tax treatment. The main downside is not being able to access the funds between now and retirement. That trade-off is rational for some, but not for others. There is no wrong answer. If you're comfortable with that, then it's rational.

[@CharlesEshun-hv8sj]

Hi Chris, this is a case scenario to have better understanding of contribution to superannuation. If one who is unemployed on Centrelink benefits is blessed with lottery winnings of millions of dollars who contribute to his superannuation as non concessional. Can he contribute millions of dollars to his superannuation? Will he be taxed for making the contribution to his superannuation as non concessional? What are the benefits for contributing his own money to his own money? Your advice much appreciated. Thanks

[@aussietaipan8700]

573 liked. I have been self contributing (NCC) into my super for decades. I'm aiming for my super balance to reach 7 figures 1st half this year. Planning to retire in 4-5 years.

[@SuperGuyAu]

Nice work, congratulations!

[@tonymellow9578]

1 am 62 and have been unemployed for the last year. I have been receiving job seekers payments from the government. I am thinking of making payments from the payments to my superannuation so I can keep building ìt up till I retire. Isit o.

[@christophers7070]

Chris, does my super statement show how much of my deposits were concessional vs non concessional? thanks, Chris

[@stevehutchinson3465]

Great Video, I just found your channel and finding it as a great resource. I am 55, and am making use of salary sacrifice to top up my fund to 27500k. I make a $3000 dependant spouse contribution to my wife’s account. I have one question, my wife does not have any income to speak of and doesn’t need to do an income tax return, can she take $1000 from our joint savings, make a personal contribution and receive the government co-contribution?

[@SuperGuyAu]

Thanks Steve. Glad you're enjoying it. To be eligible to receive the co-contribution, you need to submit a tax return and have at least 10% of your income be from work-related activities. Read more here www.ato.gov.au/individuals/super/growing-and-keeping-track-of-your-super/how-to-save-more-in-your-super/government-super-contributions/super-co-contribution/#Eligibility

[@stevehutchinson3465]

@@SuperGuyAu ThankYou

[@ranroxvideo]

Should you use your consessional contribution allowance up before using non consessional contributions? i added voluntary contributions to my super which have gone through as non- consessiontal and had zero concessional contributions as retired early.

[@SuperGuyAu]

I recommend speaking to your Financial Adviser and Accountant in relation to this as this will depend on your income for the FY. The goal should generally be to bring your tax payable to nil. As concessional contributions are taxed at 15% on entry, you don't want to contribute more than that sweet spot or you could end up paying tax unnecessarily. If you aren't currently paying tax outside super, non-concessional contributions would be more beneficial.

[@2696yogesh]

Hey, I am curious to know how does this can work for an immigrant. I am 27 and hence I am have not really given much thought to where I would like to retire. I am Australian PR holder, and if everything goes according to the plan, I might want to retire in Monaco or Mexico or India. Jokes aside, do I still receive the tax free pension option if I wait until 60 regardless of the country I live in at that time? I am comfortable locking in portion of my income into super early on. Would you recommend locking the money here or I am better of with investing in mutual funds and having that flexibility of liquidity.

[@petergravy6893]

Hi Chris, great video. The issue I have is a lost over 7% of my super in 2021/22 while in the 2 lowest risk investments in my super company - Fixed interest and Cash. I would very much like to do all these great options, but am very worried about loosing more money if the economy goes bad. I feel I should start a TTR asap and get out of super as quick as possible, as not able to retire just yet. Any suggestions?

[@SuperGuyAu]

A 7% loss does seem like a lot for a conservative portfolio. Investment performance can be good or bad either inside or outside of super. The benefit of super is the tax concessions it offers. I think you need personal advice around the strategies to employ, the investments to choose and ensure that no unnecessary fees are being deducted from your super balance. We offer personal advice through our firm, Toro Wealth. Feel free to learn more about of service and fees here superguy.com.au/advice-process/

[@trace.l1977]

Thanks for sharing! May I ask if I have carry-forward concessional contribution for $100K for example, can I use all in one financial year for tax deduction purpose (my super bal. is less than $500K)? Would this extra $100K concessional contribution subject to any tax rate once this is paid to my super account?

[@loubaggio7832]

I'm 73 yrs old. I believe that you cannot put any super in once you turn 75. Can I still use the 3 year bring forward rule for the non concessional contribution?

[@SuperGuyAu]

Yes, you may - provided there are no 'total super balance' restrictions. Read more here superguy.com.au/superannuation/non-concessional-contributions/ And, you can actually contribute up until 28 days after the end of the month in which you turn 75.

[@hiluxmax2709]

@superguy, I have a question that I cannot find anyone to answer - hope you can help. My daughter is 20, working full time for the past year and saving hard to try and get her first investment property whilst living with us at home. Is she better off pumping her money/savings into her Super to use that as a savings account for her first home whilst benefiting off the compound interest in the meantime or using a banks savings account? My understanding is anything you contribute yourself you can withdraw at any time. So could a comparison be done of putting say 600bux a week into super over 5 years compared to a savings account over 5 years and which one would benefit you more when you to go withdraw it when needed? Thankyou.

[@philiprachtman1217]

One small question if you put $3000.00 into super can you use this for both spouse tax offset and government co contribution or do you need to put $4,000.00 into super ($3,000 for spouse offset and $1000.00 for co contribution)

[@SuperGuyAu]

No, the spouse contribution will be recorded by the fund as a spouse contribution, rather than a personal contribution. An additional amount will need to be contributed to be eligible for the co-contribution.

[@philiprachtman1217]

@@SuperGuyAu Spouse contributions must be a rare thing not even Australia Super help people understand the concept

[@adamhend3211]

I'm 60, can I take transition to retirement payments and put them back in my Super as Non Concessional payments to earn tax free income on that part of my Super.

[@SuperGuyAu]

Tax free investment earnings are only available within ordinary account-based pensions, not transition to retirement pensions. But, yes, pension payments can be recontributed assuming you are eligible to make non-concessional contributions and have an active accumulation account.

[@papataiga1]

I'm 67 and still working part time, 24 hrs per week, can I send my whole pay to salary sacrifice and withdraw from my SMSF like a bank account...????

[@nealadams6826]

Same here. He doesn't talk about this like us who are past retirement age

[@martinp21000]

Thanks, appreciate confirmation I’m still rational :)

[@SuperGuyAu]

I'd say that's a fair conclusion.

[@LisaBettcher]

What I think I heard from this was... I am pension age...I have currently an accumulation Super fund with $70,000 and an Income Stream with $270,000... If i convert the Income Stream back into the Accumulation Super, then convert the $340,000 into a new Income Stream the whole amount becomes Tax Free?

[@SuperGuyAu]

Any earnings within a super accumulation account are taxed at 15%. Earnings within a pension income stream account are received tax free. However, generally, withdrawals from either a pension account or accumulation account are tax-free from age 60 onwards.

[@LisaBettcher]

@@SuperGuyAu hi..as I have Govt Super, apparently I am stuck w paying the 15% tax on the accumulation fund no matter what I try to do.....

[@nhoclam7528]

Hi Chris, at 3 mins into the video you said you don't need to pat tax if you withdraw when you are under 60 ?? Or is it over 60 ? The sound of the video is not clear.

[@SuperGuyAu]

Over 60 :)

[@TonyWalker-p8i]

My wife earns approx $60,000 a year. She can contribute after tax income to her Superannuation up to the threshold of $27,500 and any of that after tax income contributions is tax deductible? If she doesn’t have enough money to meet the $27,500 can I (her husband) give/transfer her the difference? Thanks

[@hannkg7715]

Another good one! thanks Chris!

[@SuperGuyAu]

You're welcome!

[@philiprachtman1217]

Dose putting money into super and claim a tax deduction lower your taxable income so you can then put extra Non - Concessional to get spouse offset and co-contribution

[@SuperGuyAu]

Certain types of contributions allow you to claim a tax deduction, which can reduce taxable income. Spouse contributions and co-contributions can be received by making after-tax (non-concessional) contributions, if eligible.

[@swolath]

you didn't mention you have a five year catch up rule for super if your balance is under 500k

[@SuperGuyAu]

The 5-year catch up rule applies to Concessional Contributions only. This video is about Non-Concessional Contributions.

[@papataiga1]

If I put $3,000 into my wife’s super (she earns under $20,000 per year) today, when do I get the $540…..????

[@SuperGuyAu]

When you complete your tax returns.

[@ptj1ptj172]

Yes, you would, I have been doing it for the past 2 yrs when my spouse turned to part-time to take care of our baby and her income dropped to 30k. I enjoyed a juicy 540$ rebate both times😂.

[@papataiga1]

@@SuperGuyAu thanks Chris, that was easy.....lol.

[@SebastianFlox-xv5ox]

Hey mate, great vid. If I’m aiming to retire in say 20-25 years, can the government screw me over by changing tax rules? I figure a lot can happen over 2 and a half decades / 6 odd elections.

[@SuperGuyAu]

Yes, tax rules can change. Sometimes for better sometimes for worse. Changes in tax rules can impact each person differently.

[@theowenssailingdiary5239]

Id say its very very unlikely that anything substantial could change.

[@sirdino6967]

Thankyou Chris i was looking for this info and i found it here .. im 53 and thinking about putting part of my funds sitting in a bank account earning 4% into My Super (non concessional contributions ) i think it woulld be a wise move ,as at 60 i can withdraw tax free from super .....

[@sirdino6967]

Can i withdraw non concessional contributions before 60 yo ?? say 55

[@SuperGuyAu]

You're welcome. I'm glad it was helpful.

[@SuperGuyAu]

Unfortunately not. You need to meet your superannuation preservation age first, which would be age 60 for you.

[@sirdino6967]

@@SuperGuyAu cheers mate ,

[@swolath]

I think you can,@@sirdino6967

[@leroyybrown]

I would like to clarify the concessional and non-concessional caps please. Is it 27.5K concessional plus 110K non-concessional giving a grand total of 137.5K? (I’m excluding any bring/carry forward contributions)

[@Hakucho64]

Yes, those caps are separate.

[@Jimmy-mx4cc]

What about if your over 60+ Is ..

[@selgeaus]

You forgot to mention that non-concession contribution CAN be used as tax deduction if you complete a form.

[@uberboiz]

if you do so, it's no longer considered 'non-concessional' contribution - it will count as part of your concessional contribution for the year (i.e. it will be subject to 15% contribution tax, although it would likely still give you a better overall tax outcome).

[@SuperGuyAu]

This is a bit of a technicality and can be confusing. A personal contribution can be claimed as a tax deduction if you complete a form. Once you do, it is classified as a concessional contribution. If you do not, it is a non-concessional contribution. Therefore, you cannot claim a tax deduction for a non-concessional contribution, you can only complete a form to covert the non-concessional into a concessional.

[@kimberleyfleming6739]

What is the tax deduction once you complete the form for non concessional contributions, say for $6000 in that financial year. Can Total contributions concessional and non concessional only be a total of $27,500 / year?

[@SuperGuyAu]

@@kimberleyfleming6739 The concessional contribution cap is $27,500 per financial year (plus carry-forward unused amounts if eligible) and the non-concessional contribution cap is $110,000 per financial year (plus bring-forward amounts, if eligible). Read more here www.superguy.com.au/superannuation/how-much-super-can-i-contribute/

[@EastWestMangi]

Non concessional contributions are from one's money that has already been taxed. Filling out a form and claiming a tax break for it (non concessional contribution) and translating it into a concessional contribution means one forgoes the tax-free withdrawals attached to the non concessional contributions component of Superannuation. Another way of looking at it is that one cannot get a tax break twice regarding the same thing.

[@philiprachtman1217]

Why do financial planners always go for the easy put money into super because it is tax efficient route. If you are talking long term (20+ years) you can just start a share portfolio buying all top 300 shares (which is what super funds do) and get tax efficient dividends each year then when you retire you sell $50,000 worth of capital gains (which would be about $70,000.00 actual money. put $10000 into super (claim a deduction) put extra $1000.00 into super (no deduction) get $500.00 co contibution and with the 50% cap gain discount you pay no tax personally

[@SuperGuyAu]

I think a good financial planner should create a strategy suitable to each individual client, based on their specific circumstances and objectives.

[@theowenssailingdiary5239]

Even with franking there is nothing tax efficient about dividends... Why people are obsessed about dividend stocks when they are trying to grow a portfolio is beyond me. Financial planners actually know what they are talking about. BTW, super funds do not just buy the 'top' 300 shares. You are doing all this investing outside super with after-tax dollars-thats a massive hit right off the bat. Its a Good idea if you want to retire before 60 though.

[@davidohotmail]

Tax-free components!?.... Isn't your super tax free anyway when you are over 60 or 65?

[@SuperGuyAu]

Yes, unless you pass away and your super is paid to a non-tax dependant (e.g. adult child)

[@ggbogo935]

you absolutely can and do get tax deduction on non-concessional contributions

[@SuperGuyAu]

You can claim a tax deduction on personal contributions at which point they become concessional contributions. Saying that you get a tax deduction on non-concessional contributions is an oxymoron.