Tighter superannuation rules will apply from 1 July 2017 as part of the super reforms announced in last year’s Federal Budget.
The new rules include the introduction of a $1.6 million super balance cap for after-tax contributions; a maximum of up to $25,000 for concessional contributions; and the removal of the current “bring-forward” rule allowing $540,000 of contributions in one year.
Although the new rules will come into effect from 1 July 2017, individuals can take advantage of the current rules to top up their nest egg.
Individuals under 65 who wish to make a large contribution, in particular, those with inheritances or who have recently sold a property or other large asset can make the most of this last-chance opportunity to contribute up to $540,000 until 30 June.
From 1 July 2017, individuals will only be able to bring forward up to three year’s worth of after-tax contributions, i.e $300,000 over three years.
The bring forward rule cannot be accessed by Wealth Matters – Issue 38, 2017 Boost your retirement savings Reverse mortgages: a retirement solution those aged between 65 and 74 who meet the work test, however, they can still make annual after-tax contributions.
Those with balances in excess of the $1.6 million cap will need to review their super before 30 June to continue to make after-tax contributions. Furthermore, individuals with a balance close to $1.6 million will only be able to bring forward the annual cap amount for the number of years that would take your balance to $1.6 million.
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