How Australians over 55 can make Downsizer Super Contributions
Extra super contributions are payments you put into your superannuation fund to grow your retirement savings.
The nature of the extra super contributions could save you a great deal of money on taxes when you retire.
Those 55 and older have a unique way of boosting their superannuation when selling their home.
The downsizer contribution lets you contribute up to $300,000 from the sale proceeds directly to your super fund. (Some eligibility requirements apply.)
Who can use the downsizer contribution?
Anyone over 55 can make downsizer contributions.
In the 2023-24 financial year, women made 57% of all downsizer contributions. Women made an average contribution of $262,000 vs the $259,000 average for men.
When Do People Typically Use This Strategy?
While you can make downsizer contributions from 55 onwards, you can’t access the funds until after 60.
So, most people who take advantage of downsizer contributions are between the ages of 65 and 69. At this age, these contributions can be accessed even while still working.
Why Downsizer Contributions Are Useful
- Extra benefit for couples: Each person in a couple can contribute up to $300,000, even if only one of them owns the property. That means couples can contribute up to $600,000 together.
- No Need to ‘Downsize’: You can make downsizer contributions even if you buy a larger home (or something else) from the proceeds of the sale.
- More flexible: Downsizer contributions do not have the same upper age limits, work test, or super balance rules. However, the amount that can go toward a retirement pension is limited by your transfer balance cap.
How do I Make Extra Super Contributions?
Downsizer contributions are one of several ways you can grow your super.
The best way for you depends on your situation and life goals. We’d be happy to help you choose the best methods for your goals. Get in touch if you’d like a free consultation.
