How will upcoming super rules effect me?
With changes to the superannuation rules taking effect on 1 July this year, the clock is ticking. But don’t worry, you’re in good hands. We’re here to help you get across some of the changes that may affect you.
|The before-tax contributions cap will be reduced from $30,000 per year (or $35,000 if you’re turning 50 or over before July 1 2017) to $25,000 per year. This means there’s less that you can add to your super before tax each year.
|The after-tax super contributions cap will also decrease from $180,000 per year to $100,000 per year. This means you could contribute $80,000 more in after-tax contributions than what will be possible when the after-tax super contributions cap is reduced on 1 July 2017, if you decide that’s right for you.
|If you’re converting your super into a pension, you’ll be restricted to a limit of $1.6 million in your pension account. If you already have more than that, the excess will need to be placed back into the super accumulation phase.
|There are also other changes you may need to be aware of, including changes to defined benefit funds and transition to retirement pensions
Remember, these changes will come into effect on 1 July 2017.
Talk to your adviser
To find out how these and other changes to the superannuation rules could affect you, speak to your financial adviser.
What else you need to know
If you contribute more than these caps, you may have to pay extra tax along with interest charges. Also, once your funds are invested in super, you need to meet a condition of release such as retirement and reaching your preservation age, to get access to the funds. The value of your investment in super can go up and down. Before making extra contributions to your super, make sure you understand and are comfortable with any risks associated with your chosen investment option.