Life got in the way. Your super can still catch up.

Life doesn't always move in a straight line.

There may have been times when other priorities took centre stage. Building a career, raising a family, studying, caring for loved ones or paying off a mortgage can all make it harder to focus on retirement savings.

The good news is that retirement savings don't always have to follow a perfectly straight path. Depending on your circumstances, there may be opportunities to make up for some of the years when contributing more to super wasn't possible.

When life happens

For many people, retirement planning happens alongside competing financial goals.

You may have experienced periods where:

• work hours were reduced
• income was interrupted
• family responsibilities increased
• paying down debt became the priority
• everyday living costs left little room for additional savings

That doesn't necessarily mean the opportunity to grow your retirement savings has passed. As circumstances change, some people find they have greater capacity to contribute to super than they did in previous years.

A little-known rule that may help

Catch-up (also known as carry forward) concessional contributions give eligible Australians the ability to use unused concessional contribution cap amounts from previous financial years. 

In simple terms, if you didn't use your full concessional contribution cap in earlier years, you may be able to carry forward the unused portion and use it later. 

For some members, this can create additional flexibility to contribute more to super when the timing is right.

Who may be eligible?

To use carried-forward concessional contribution amounts:

• your total super balance must generally be less than $500,000 on 30 June of the previous financial year
• only unused concessional cap amounts accrued from 1 July 2018 can be carried forward
• unused amounts can generally be carried forward for up to five years before they expire. 

Eligibility rules can be complex, so it's important to understand those rules and your circumstances before making additional contributions.

A super catch-up story 

Nicole is 42 and works in the Australian Public Service.

For several years, most of Nicole’s spare money went towards raising a family and paying off her mortgage. Like many people, retirement savings weren't always her main financial priority.

While Nicole continued receiving employer super contributions, she wasn't in a position to make additional contributions through salary sacrifice or personal deductible contributions. Now that some of her financial commitments have eased, Nicole wants to focus more on building her retirement savings.

When reviewing her super, Nicole discovers she hasn't always used her full concessional contributions cap. Because unused cap amounts can generally be carried forward for up to five years, some of those unused amounts may still be available to her, subject to eligibility requirements.

What this could mean for Nicole

If Nicole meets the eligibility requirements, she may be able to use some of her unused concessional contribution cap amounts from previous financial years, in addition to the current year's cap.

In this example, Nicole may be able to contribute up to $42,500 in concessional contributions in the financial year ending 30 June 2027, made up of:

• $32,500 annual concessional contributions cap for the financial year ending 30 June 2027
• $10,000 unused concessional contribution cap carried forward from the financial year ending 30 June 2026

Nicole may have more unused concessional contributions cap available to carry forward from up to five years back. For Nicole, this could create an opportunity to contribute more to super now that her circumstances have changed.

Why this matters?

There may be years when family commitments, study, caring responsibilities, housing costs or other priorities make it difficult to contribute extra to super.

Carry-forward concessional contributions can provide eligible Australians with additional flexibility by allowing them to make use of some unused cap amounts from the previous five financial years.

Important

To use carry-forward concessional contributions, Nicole would need to meet the relevant eligibility requirements, including the total super balance threshold that applies at the time the contribution is made.

This example is illustrative only and isn't an estimate of future investment returns, fees or costs. Individual circumstances may differ. For more information on carry-forward concessional contributions, visit the ATO website here.

Why your annual statement matters

Many people see their annual statement as a report card. But it can also be a chance to pause and ask a few important questions:

• Am I on track for the retirement I want?
• Have my priorities changed?
• Can I afford to contribute more than I have in previous years?
• Have I missed opportunities to boost my super?

For some members, catch-up concessional contributions may be one way to explore those questions.  

It's never just about one year

Retirement savings are built over decades. Few people contribute exactly the same amount every year or follow a perfectly predictable financial journey.

Periods of lower contributions are common and often reflect major life events rather than poor financial decisions. What's important is staying engaged with your super and understanding the options available as your circumstances change.

Before making additional contributions

Contribution caps and eligibility rules apply, and exceeding contribution caps may result in additional tax.  Before making additional contributions, consider reviewing your contribution history and seeking guidance if you're unsure whether catch-up concessional contributions are right for you.

If you're not sure where to start, support is available.

• PSSap and CSCri members can speak with a CSC Super and Retirement Specialist, who can guide you through the information in your statement and answer questions about your account. Speak with a CSC Super and Retirement Specialist.
• ADF Super members can speak with a CSC Member Educator for support in understanding their statement and the options available to them. Book a session with a CSC Member Educator.

A simple conversation can help you better understand your super and feel more confident about your future.