Making the Most of Unused Caps Before Retirement

October 2, 2025

If you’re starting to think seriously about retirement, one of the most powerful ways to boost your super is by making the most of the government’s catch-up concessional contribution rules. Many Australians don’t even realise these exist, but they can make a big difference in the final years before leaving work (and save you a bunch in tax).

What Are Concessional Contributions?

Concessional contributions are super contributions made before tax. These include:

• Employer Super Guarantee (SG) contributions
• Salary sacrifice contributions from your pay
• Personal contributions you claim as a tax deduction

Inside super, these amounts are usually taxed at 15%—often much lower than your marginal income tax rate.

How Do Catch-Up Contributions Work?

Since 1 July 2018, you’ve been able to carry forward any unused portion of your annual concessional cap (currently $30,000.00) for up to five years.

This means if you didn’t contribute the full amount in previous years, you may be able to “catch up” later. There are a couple of key rules:

• You must have a total super balance under $500,000 as at 30 June of the previous financial year.
• Unused amounts expire after five years if you don’t use them.

Why This Matters for Pre-Retirees

For many people in their 50s and 60s, cash flow improves as the mortgage winds down or children become financially independent. That’s often when the focus shifts to building retirement savings quickly.

Catch-up contributions give you the flexibility to contribute larger amounts in those later years, without being locked into doing so every year. It’s especially handy if your income has varied, or you’ve taken time away from work.

A Simple Example

Let’s say Emma has a total super balance of $420,000 at 30 June 2025, so she’s eligible to use the catch-up rules in FY26.

Here’s what she contributed in recent years compared with the actual caps:

• 2020–21 (cap $25,000): Contributed $20,000 → $5,000 unused
• 2021–22 (cap $27,500): Contributed $22,500 → $5,000 unused
• 2022–23 (cap $27,500): Contributed $25,000 → $2,500 unused
• 2023–24 (cap $27,500): Contributed $20,000 → $7,500 unused
• 2024–25 (cap $30,000): Contributed $25,000 → $5,000 unused

By 1 July 2025, Emma has a total of $25,000 unused concessional contributions carried forward.

In 2025–26, the concessional cap is $30,000. Emma receives an inheritance and decides to contribute more than usual. She can contribute:

• $30,000 (the standard cap for FY26), plus
• $25,000 (carried forward from prior years),
• = $55,000 total concessional contributions.

Because Emma earns $140,000 per year, she can claim the full $55,000 as a tax deduction. This reduces her taxable income to $85,000 for the year, delivering a substantial tax saving while fast-tracking her super.

Benefits and Considerations

Benefits:

• Accelerate your super growth in the lead-up to retirement
• Reduce your tax bill by claiming a deduction
• Flexibility if you haven’t been able to contribute consistently

Considerations:

• Only available if your balance is below $500,000 at the prior 30 June
• Unused caps expire after five years
• You still need to meet contribution eligibility rules (like the work test if over 67)
• Tax planning is important to avoid unintended impacts on other benefits

With the recent changes to land tax in Victoria, the loss of certain tax deductions in retirement, and a general desire to simplify their financial position, many clients are rethinking whether it makes sense to hold an investment property into retirement. Increasingly, we’re seeing clients explore alternative strategies. One option gaining traction is using the catch-up concessional contribution rules, which allow them to sell an investment property, contribute the proceeds into super, and at the same time reduce their personal tax bill.

Final Word

Catch-up contributions can be a smart way to top up super when you have the capacity to do so, but they’re not a one-size-fits-all strategy. Whether it’s right for you depends on your income, your super balance, and your retirement plans.

Speaking with a financial planner can help you decide if this strategy should be part of your roadmap to retirement.

Take the First Step Today with a complimentary discussion and review of the opportunities that exist for you.

Disclaimer: This article provides general information only and does not take into account your personal circumstances. Please seek personal financial advice before making any decisions about superannuation or contributions.