Personal top-ups can trigger excess contribution edicts from the ATO, leading to a chain of unwanted consequences.
was $2 million on June 30, 2021. Consequently, his non-concessional contributions cap is zero because his TSB was $1.7 million or more – meaning he’s ineligible to make after-tax contributions.contributions from the ATO in respect of his contribution. Not an uncommon occurrence.It’s important to understand the process.
Option one allows you to withdraw the excess contributions and 85 per cent of “associated earnings”. The earnings are then taxed at your marginal rate plus Medicare levy less a 15 per cent tax offset for tax already paid. First, money comes out of super that need not have come out. Chris is having to withdraw his contribution and 85 per cent of associated earnings – earnings his fund will not have made especially in 2022 when many superannuation balances dipped.
Making regular deposits into an investment at regular intervals over a period of time – “dollar cost averaging” – is a powerful way to invest. It allows you to build exposure to growth assets in a disciplined way, can reduce the risk of investing in volatile markets and avoids the pitfalls of attempting to time entry into markets. A salary-sacrifice arrangement with your employer is a way of implementing dollar cost averaging.
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