In July 2022, a significant change was introduced to the Australian superannuation landscape: individuals over 65 no longer need to meet the ‘work test’ to voluntarily contribute to their superannuation. This offers greater flexibility and new strategic opportunities for retirement planning.
Extended wealth accumulation
Previously, individuals over 65 had to work at least 40 hours over a consecutive 30-day period to make voluntary contributions. With the work test gone, they can now contribute freely – an extended window for wealth accumulation that can support a more comfortable retirement through additional contributions and compounding growth.
Tax planning opportunities
Contributions can be concessional (employer, salary sacrifice, personal deductible) or non-concessional (from after-tax income). For those transitioning between work and retirement, strategically using the concessional and non-concessional caps can optimise their tax position. Speak with one of our financial advisers for strategies based on your circumstances.
Estate planning considerations
Superannuation is a valuable asset that can pass to beneficiaries. Voluntary contributions can optimise estate planning and increase the balance inherited by loved ones – though super is subject to different tax treatment on inheritance depending on the deceased’s age and the beneficiary relationship.
Spousal contributions simplified
Removing the work test makes spousal contributions simpler for those over 65 – useful where one partner has a higher balance and the couple wants to equalise their retirement savings.
Reconsidering retirement timelines
The new rules let individuals continue working beyond 65 without meeting the work test, giving more control to reassess retirement goals and extend working years if desired. Seek advice from a financial adviser or superannuation expert to develop a tailored strategy that takes advantage of these opportunities.