One day, you’ll be enjoying your retirement – whether exploring foreign lands or drinking a latte closer to home. So now might be a good time to consider giving your superannuation an extra BOOST. Especially because the rules around how much you can contribute will change from 1 July 2017.
Currently (before 30 June 2017):
- You can make before-tax payments to your superannuation of up to $30,000 if you are aged under 50 or up to $35,000 if you are aged 50 or over. This amount is taxed at 15% per year*. This includes your employer super contributions.
- You can make lump sum payments (after tax) to your superannuation of up to $180,000 per year or up to $540,000 (using the bring forward rule if you are under age 65)
*An additional 15% tax rate may apply to higher income earners.
From 1 July 2017:
- Before-tax payments to your superannuation will be capped at $25,000 per year, regardless of your age.
- The maximum after-tax limit will change to $100,000 per year ($300,000 under the bring forward rule for those under 65 years) and even then, only if your total superannuation balance is less than $1.6 million as at 30 June for the previous financial year.
Consider taking advantage of higher limits on your contributions for a short time only
- Every little bit may help count towards making your retirement more comfortable.
- Access a higher contributions limit to make your money work harder.
- This may be your last chance to contribute after-tax payments as a result of the amount you have in superannuation or to use the bring forward rules as a result of your age.
Note: this option may not be right for you and depends on your financial situation and needs.
Ready to boost your super? Give us a call to discuss your options further.
Things you should know
This information is current as at 20 April 2017. This information has been prepared without taking account of your personal objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs. This information provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such. The tax position described is a general statement and is for guidance only. It has not been prepared by a registered tax agent. It does not constitute tax advice and is based on current tax laws and our interpretation. Your individual situation may differ and you should seek independent professional tax advice.
Superannuation is a means of saving for retirement, which is, in part, compulsory. The government has placed restrictions on when you can access your investment held in superannuation. The Government has set caps on the amount of money that you can add to superannuation each year on both a concessional and non-concessional tax basis. There will be tax consequences if you breach these caps. For more detail, speak with a financial adviser or visit the ATO website.
© BT Financial Group 2017.