Do you understand the super bring-forward rule?

Have you heard of the super bring-forward rule? There was a lot of discussion about it last year because from 1 July 2021 more Australians became eligible to access its benefits.

The rule applies to non-concessional contributions and is a great way for you to be able to increase your super balance before you retire.

If you sell an asset of considerable value or receive a significant financial windfall, it could give you the opportunity to deposit that money into your super without the constraints of the usual annual contribution caps.

Today, we take a closer look at the rule and how you might be able to utilise it in your superannuation strategy.

The super bring-forward rule allows you to make up to three years’ worth of non-concessional contributions in one financial year.

There are certain eligibility criteria that you need to meet, but it does mean you might be able to boost your super balance by up to $330,000 without paying any additional tax.

There are some specific guidelines that you need to follow, but it can be a helpful strategy if you find yourself with a lump sum of money that you want to utilise for your retirement.

There are two separate factors that impact your eligibility.

As noted above your super balance determines how much you can contribute, but your age also influences how you can use the bring-forward rule.

When it comes to eligibility, the ATO says:

“If you are under 67 years of age at any time in a financial year, you may be able to make non-concessional contributions of up to three times the annual non-concessional contributions cap in that financial year.

If you are 67 years old or older on 1 July, you cannot access the bring-forward arrangement in that financial year.

You need to meet conditions for certain types of contributions to be accepted by your super fund, including satisfying the work test or work test exemption.”