Recontribution Strategy Calculator for Superannuation

This recontribution strategy calculator will illustrate how:

  • A recontribution strategy calculator will impact the proportions of your tax components; and
  • A recontribution strategy can reduce potential death benefits tax.

Recontribution Strategy Calculator

Use this recontribution strategy calculator to input the details specific to your situation.

How To Use the Recontribution Strategy Calculator

To use the recontribution strategy calculator, above, follow these steps:

1. Enter in your total superannuation balance, as it currently stands.

2. Enter the tax-free component portion of your balance. This will not be on your superannuation statement, you will need to contact your super fund. Everyone has a different tax-free component portion.

3. Enter the amount of your balance that you will withdraw and then recontribute as a non-concessional contribution – the essence of a recontribution strategy.

4. The calculator will automatically calculate your super balance after performing the recontribution strategy.

5. The calculator will automatically calculate the new tax-free component of your super balance, once the recontribution strategy has been performed.

6. The calculator will automatically calculate the new taxable component of your super balance, once the recontribution strategy has been performed.

7. The calculator will automatically calculate the reduction in potential death benefits tax achieved as a result of the recontribution strategy.

What Is a Superannuation Recontribution Strategy?

A superannuation recontribution strategy is the act of withdrawing all or part of your superannuation balance, consisting partially of taxable components, and contributing the withdrawal back into super as a non-concessional contribution – effectively converting taxable components to tax-free components.

The benefits of a recontribution strategy include:

  • converting taxable to tax-free components will reduce or eliminate potential death benefits tax; and
  • protect against possible changes to tax on super withdrawals for over 60s.

Death benefits tax is payable when your superannuation balance (including accumulation and pension accounts) is paid to a non-tax dependant (e.g. child over 18) when you pass away.

What is a Recontribution Strategy Calculator?

A recontribution strategy calculator can help you calculate the conversion of taxable to tax-free components and the reduction in death benefits tax as a result of performing a recontribution strategy, specific to your superannuation balance and components.

Care should be taken to understand tax implications of any withdrawals and compliance with super rules and contribution caps before performing a recontribution strategy. Due to the complexity associated with such a strategy, professional financial advice should be sought.

When to Use a Super Recontribution Strategy Calculator?

A recontribution strategy can be used at any time. However, it should be noted that your super balance and/or tax components will change every day. Therefore, the recontribution strategy calculation applies to your balance on that particular day, only. In saying that, it is unlikely for your super balance and tax components to change significantly day-to-day, so the calculation should remain valid for a reasonable period of time. If you do choose to implement a recontribution strategy, you redo the recontribution strategy calculation as close to the date as possible and seek professional advice in relation to it.

If you would like personal advice to ensure that you implement your recontribution strategy correctly, please make a complimentary appointment with our advice team here.

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