Australians who top up their superannuation before the end of the financial year could boost their retirement savings by thousands and lower their tax bills. But experts are warning that there are only a few weeks left to take advantage of one important tax deduction.

Carry forward rules allow Aussies to use up any unused concessional contribution amounts from the last five years and claim them as a tax deduction this financial year. It currently goes back to the 2019-2020 financial year, but once we hit July 1, that financial year will be gone.

Vanguard chief of personal investor Renae Smith told Yahoo Finance carry forward rules applied if an individual had a total super balance under $500,000 as of June 30 last financial year.

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“For example, if an individual contributed $15,000 in employer and personal concessional contributions in 2019–20 when the annual cap was $25,000, they may be eligible to carry forward the unused $10,000 and add it to their concessional contributions this financial year,” she explained.

“With the current annual concessional cap at $30,000, this means that person could contribute up to $40,000 this year by using the carried-forward amount.”

The concessional contributions cap includes any mandatory contributions from your employer. It’s worth noting that exceeding the cap could lead to paying extra tax.

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What are the benefits of making extra superannuation contributions?

Making extra superannuation contributions can help lower your taxable income and top up your retirement savings.

For example, Vanguard found that a 30-year-old earning $80,000 who made a $1,000 voluntary super contribution and claimed a deduction would receive a refund of $320 when they lodged their return.

After accounting for the 15 per cent contribution tax, $850 would be added to their superannuation.

If they were able to make this $1,000 contribution every year for 15 years, it could increase their super balance by $79,856 by the time they reach retirement age at 67.

Who might this strategy suit?

Super contributions are taxed at a favourable rate of 15 per cent, so the strategy may suit people who have higher marginal tax rates than this.

“Voluntary super contributions can be especially beneficial for Australians on average or higher incomes, as they may be eligible for tax deductions that reduce their taxable income,” Smith told Yahoo Finance.