Contributing to Super After Retirement: What are the Rules?
Written by: Chris Strano
So, you’re retired, but you still want to make contributions to super?
Okay, I see what’s going on here. You’ve done the calculations and can see the benefits of contributing to super, but you just want to double check the superannuation retirement rules. Am I right?
And believe you me, there are a few rules you need to be mindful of when contributing to super after retirement, so let’s take a look.
Superannuation Contributions After Retirement
Your eligibility to make contributions to superannuation after retirement is based on five factors:
- Your age;
- The type of contribution being made;
- Your account balance;
- When you retired; and
- Whether you will continue to work in any capacity.
There are also other types of contributions that can be made to super designed specifically for people who are already retired.
Related article: Superannuation Advice
Super Contributions Under Age 67 and Retired
Also, if you are over age 65, you are eligible to make the downsizer contribution.
Super Contributions Aged Between 67 to 69 and Retired
If you are aged 67 or more, but below age 70, you are only able to receive mandated employer contributions or make downsizer contributions.
- if you are retired, but have worked at least 40 hours over any consecutive 30-day period in the current financial year (known as the work test); or
- have a total super balance below $300,000 and met the work test in the previous financial year, (known as the work-test exemption – which can only be applied in one financial year);
then you are eligible to make any type of super contribution.
Related Article: Super Contributions Over 65
Super Contributions Aged Between 70 to 74 and Retired
Being aged between 70 and 74 means you can only receive mandated employer contributions and can only make downsizer contributions.
However, if you meet the work test or work-test exemption, you can also make personal concessional and non-concessional contributions up until 28 days after the end of the month in which you turn age 75.
Super Contributions Over Age 75
Being over age 75 means you can only receive mandated employer contributions and can only make downsizer contributions.
How Much Can A Retiree Put Into Super?
You always need to be mindful of superannuation contribution caps, as well as the limitations on non-concessional contributions if your total super balance exceeds or is near the transfer balance cap.
As a retiree, you are governed by the same contribution caps as the employed and self-employed.
The general non-concessional contribution cap is $100,000 per financial year and the general concessional contribution cap is $25,000 per financial year.
If you are under age 65, you may be able to utilise the non-concessional contribution bring-forward rule. In regards to concessional contributions, you may be eligible to utilise any carry-forward unused concessional contributions while under age 75.
If your total superannuation balance exceeds the transfer balance cap of $1.6 million, you are unable to make any non-concessional contributions.
More details about the types of contributions that can be made to superannuation and how much you can contribute can be found here.
Remember, making contributions to super can be a great tax-effective retirement planning strategy, but before making any contributions to super, you should keep in mind that any amount contributed to super can only be accessed again once you have met a superannuation condition of release, such as retirement or reaching age 65.