CANSTAR has warned that the reduced concessional cap for superannuation contributions is likely to catch some people out.
It said if members exceeded their concessional contributions cap and after-tax contributions tax, they could face a 46.5 per cent tax rate, charged twice.
The 93 per cent tax increase example given by the Australian Taxation Office means members should be checking their superannuation contributions now, CANSTAR said.
CANSTAR research manager Chris Groth said despite the potential for exceeding the cap, super contributions were a good way to keep your money from the Government.
"Despite the potential tax traps, contributing extra to your super investments is a good thing, as your contributions' tax is only 15 per cent and the tax on your investment earnings is only 15 per cent. This compares to, say, a term deposit which you invest in with your tax dollars and then pay the full marginal tax rate on your earnings," he said.
Groth said superannuation members should be speaking with their financial planner to ensure they receive the most out of extra contributions.
The research house has offered a silver lining after super fund returns saw the end of a five-month streak last month.
A survey of almost 6,000 fund members has identified weakening retirement confidence, particularly among those under 55 years of age, signalling an opportunity for super funds to better engage with members on their retirement journey.
The funds have confirmed the signing of a successor fund transfer deed, moving closer to creating a new $29 billion entity.
A number of measures, including super on Paid Parental Leave, funding to recover unpaid super, and frameworks to encourage investment in the energy transition, have been welcomed by the superannuation industry.
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