Many people who are either contributing towards their superannuation, or living off their super savings are unaware of some significant changes to superannuation which are coming into effect from July1 this year.
The changes are far too complicated to explain in this short article so all I have done is to list them below. There are certainly some game changers here and if you wish to know more about them, I suggest you contact your super fund or financial adviser and get some advice on how they could affect you.
Here are the main ones –
- Removal of tax exemption for transition-to-retirement pensions (TRIPs)
- Cut in annual concessional (before-tax) contributions cap to $25,000
- Introduction of a $1.6 million transfer balance cap
- Introduction of catch-up concessional contributions over 5-year period (from July 2018)
- Cut in annual non-concessional (after-tax) contributions cap to $100,000
- Continuation of the Low Income Super Contribution (super tax refund)
- Removal of work test for over-65s, for making super contributions (SCRAPPED)
- Extension of tax exemption for other types of retirement products.
- Increase in income threshold for spouse superannuation tax offset to $37,000 (and $40,000)
- Tax hike for more Australians: 30% tax on concessional (before-tax) super contributions
- Expansion of tax-deductible super contributions to all Australians
- Removal of option to treat a pension payment as a lump sum payment, for tax purposes
- Removal of anti-detriment provisions
- Non-super change: Delivery of personal income tax cuts
- Proposed introduction of non-financial superannuation changes
If you would like to know some more detail about these changes you can find some initial information on this web site – www.superguide.com.au
As most people who are still building up their super are likely to be spending 20 – 30 years in retirement, it seems fairly logical that they should do a little retirement planning. Clearly, working out how the changes outlined above will impact on your retirement is no simple task. Most of us would need some professional help.
However financial planning is only one aspect of retirement planning. 20 years is a long time to fill and if you haven’t given much thought to what you want to do with all this spare time, you’re in danger of wasting it. You can only go around Australia so many times or fish, play golf or cards so many days a week. Planning what you want to do with your retirement years is just as important as planning how long your money will last.
Our new range of books can help with this planning. There’s useful information from dozens of experts. For more details, click on whichever books on this web site interest you.