Downsizer contributions into superannuation have shown consistency with around 16,000 individuals contributing over $4 billion collectively in the 2024/25 financial year. Although the total contributions slightly decreased from the previous year, the scheme has attracted a steady number of participants.
The eligibility age for making downsizer contributions was lowered to 55 in the 2023 financial year, allowing individuals aged 65 and older to enhance their retirement savings without affecting their non-concessional contribution cap. Since the scheme’s inception in 2019, 98,500 super fund members have contributed a total of $25.255 billion following the sale of an eligible home.
Data released by the ATO revealed that individuals aged 55 to 59 and 60 to 64 have taken advantage of downsizer contributions, with a significant number of contributions coming from older demographics as well. Surprisingly, individuals over 80, including those aged 90 and above, have also made downsizer contributions, showcasing a broad age range benefiting from the scheme.
Women have emerged as prominent users of downsizer contributions, surpassing men in participation since the eligibility age reduction. The data indicated that women accounted for 57% of contributions in recent years, with a total of 54,700 women making contributions compared to 43,900 men. The average contribution amount has seen a steady increase over the years, indicating a growing interest among both genders to boost their retirement savings.
Expert commentary suggests that the rise in female participation could be attributed to a greater awareness of financial planning and retirement strategies among women. This shift in contribution patterns reflects a positive trend towards gender equality in superannuation planning and underscores the importance of tailored financial solutions for women.
Industry experts believe that downsizer contributions play a crucial role in enhancing retirement outcomes for individuals, especially in a challenging economic environment. The scheme provides a strategic avenue for individuals to optimize their superannuation savings and secure a comfortable retirement.
As the downsizer contribution scheme continues to evolve, it is essential for individuals to stay informed about the eligibility criteria and potential benefits. With more women actively engaging in superannuation planning through downsizer contributions, the landscape of retirement savings is witnessing a positive transformation towards inclusivity and financial empowerment.
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