We all have limited time to contribute and build up our super to fund our retirement at concessional tax rates. From 1 July 2017 a raft of changes will come into effect to limit how much we can put into super. Concessional (before tax contributions) will be reduced to $25,000 for everyone. Non-concessional (after tax) contributions will reduce from $180,000 per annum currently to $100,000 per annum.
Those nearing retirement have a one-off opportunity to contribute a total of $540,000 non-concessional (after tax) contributions into super before 1 July 2017 before the rules change forever. Using the “bring forward” rule this allows us to contribute up to 3 years of non-concessional contributions into super (provided you have not previously used this in the last 3 years). Currently allowable is $180,000 per annum times 3 years, a total of $540,000. From 1 July 2017 this will reduce to $300,000. You may need to act now if you were intending to sell off assets to fund the retirement. Income from funds in super up to $1.6 million balance are taxed at zero percent, whereas income from assets left outside of super are taxed at normal tax rates, up to 49% for income over $180,000.
Please be aware that the rules around contributions are complicated and exceeding your caps will have very adverse tax consequences, so always specific seek advice before implementing any super strategies.
Disclaimer: This article contains general information; before you make any financial or investment decision you should seek professional advice to take into account your individual objectives, financial situation and individual needs. Click for more detail regarding this disclaimer.