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The most common notion Australians usually think of when it comes to superannuation, is that you contribute to your super while you’re working, and withdraw it when you retire. However, in some cases, you might be eligible to use a superannuation recontribution strategy to help you best prepare for a secure retirement. 

What does Superannuation Recontribution Strategy mean?

It means you might be eligible to withdraw a portion of your super and contribute back into your super fund later. 

A super recontribution strategy involves withdrawing a lump sum, in accordance with specific conditions as advised by the ATO, paying any necessary tax on the withdrawal, and re-contributing these funds into superannuation as a non-concessional contribution (further explained below). 

A superannuation recontribution strategy could ensure that you or your beneficiaries can withdraw your super later on in life without needing to pay any tax. 

Contributing to your super could also be used as an estate planning strategy which allows a deceased person’s beneficiaries to access their super without worrying about the tax liability. 

However, it’s important to note, that to recontribute super you need to be able to withdraw benefits and make contributions. 

Let’s take a further look…

The Benefits of a Superannuation Recontribution Strategy

A great reason to use a super recontribution strategy is the tax benefits. 

If eligible, this strategy converts all (or part) of the taxable portion of your superannuation benefit into a tax-free component. 

Replacing the taxable components with non-taxable ones will provide significant benefits for several different reasons. 

Are you eligible to implement a Superannuation Recontribution strategy?

To enable you to re-contribute the money, you must be eligible to contribute to your superannuation which generally means you need to either be:

  • under age 67, 
  • age 67-74 and have met the work test, 
  • age 67 – 74 and meet the requirements for the work test exemption.

If you have met the eligibility criteria so far, and you think this strategy might be worthwhile to you, remember that taking out money from your super may entail paying capital gains tax as well as investment transaction costs. You want to know exactly how much it will cost you to take money out of your super. 

If you want to ensure that you can take money out of your super without causing any potential problems that may come back and haunt you later on, your best bet is to consult with an experienced financial advisor. These professionals will help you look into the best available options and discuss them with you.

If you’re looking for financial planning services or help with your superannuation recontribution strategy, come to HH Wealth! 

At HH Wealth, our aim is simple: to help you achieve financial freedom. 

Conveniently located in Fortitude Valley (with cheap onsite parking) for all of your Financial Advice and Financial Planning needs and questions. 

Contact us and take the first step to achieving financial freedom today! 

CB Wealth Australian Pty Ltd T/As HH Wealth is a Corporate Authorised Representative (No. 1283595) of Axies Pty Ltd ABN 38 136 704 446 AFSL No 339 384. Chris Holme is an Authorised Representative (No. 1004793) of Axies Pty Ltd ABN 38 136 704 446 AFSL No 339384.

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