Avoiding Costly EOFY Superannuation Mistakes

In the lead-up to the end of the financial year, many investors rush to make superannuation decisions intended to boost retirement savings. However, these last-minute actions often lead to costly errors and missed opportunities. With the June 30 deadline approaching, decisions made in haste can reduce long-term returns or result in unexpected tax bills.

During June, superannuation and investment firms report a noticeable rise in confusion and late changes to portfolios. Many people hurry to make voluntary contributions, claim tax offsets or take advantage of government schemes without fully understanding the rules and key cut-off dates. Most super funds require contributions to be received several days before June 30, so you may miss out even if a transfer is made on the final day.

Common mistakes include exceeding contribution caps, overlooking spouse contribution incentives or failing to ensure payments are processed on time. For instance, the concessional contribution cap for 2023–24 is $30,000. Going over this amount may trigger additional taxes. Contributing too late could also mean missing out on programs such as the co-contribution bonus or the First Home Super Saver Scheme.

These mistakes pose both financial and strategic risks. A $1,000 contribution made early at around age 30 can grow to more than $8,400 by retirement due to compound interest. Missing the opportunity because of timing issues or a lack of information can result in the loss of both tax savings and potential growth. If your total super balance is under $500,000, you may be able to carry forward unused concessional contributions from the past five years, but this only applies if action is taken before the deadline.

While end-of-financial-year strategies can offer significant rewards, many Australians are caught off guard by deadlines. Better planning is often needed, especially when using payment options that require several days of processing. Reviewing your eligibility, contribution timing and caps can help prevent costly setbacks to your retirement savings.

Source: The Australian, Hudson Financial Planning, Vivid Enterprise Solutions, Lawpath