Megan owns a large property on Mt Macedon and is considering downsizing to a smaller property. By downsizing she will have excess cash and is considering contributing to her Superannuation Fund. Megan is employed on a part time basis and earns $65,000 per annum.
If Megan is 64
She can contribute the following:
- Up to $35,000 as a concessional contribution i.e. before tax as a salary sacrifice (this cap includes any Super Guarantee contributions)
- Up to $180,000 non-concessional contribution i.e. after tax. As she is under 65 Megan can access the three year bring forward rule. The bring forward rule allows you to contribute three years of non-concessional contributions in one year i.e. $540,000. However if she contributes the $540,000 she is unable to make non-concessional contributions for the next two years.
If Megan is 65
She can contribute the following provided she meets the work test:
- Up to $35,000 as a concessional contribution (as above)
- Up to $180,000 non-concessional contribution.
In order to meet the work test she must work 40 hours in a 30 day period during that year.
Note: For those aged 49 or younger on 1 July 2014 the concessional contribution limit is $30,000 per annum.