Have you got a spare Million bucks?
Our firm is getting real busy at the moment preparing our clients for the June 30 countdown. There are a number of big changes happening with super contributions. Many people understand that the deductible contributions will be falling to $25,000.00 p.a. come 1st July 2017, but there is in my view bigger changes happening with non - concessional contributions.
These contributions are the juicy, life changing ones where you can get sizeable chunks into your super account. No tax gets taken out on the way in or out and the amount aside from earnings are not counted towards death benefits taxes. I love these kinds of contributions because it means my client is taking huge actions towards retiring right.
The current annual limit is $180,000.00 p.a. as long as you are under age 65 or can meet a work test after 65. If you are under age 65, you are able to bring 3 years worth of contributions forward to make an individual contribution of $540,000.00. As a couple, now is the last time you get a chance to put a maximum of $1,080,000.00 as a big fat deposit into your retirement account where currently you pay zero tax on earnings in pension phase.
Post 1st July, these limits will reduce to $100,000.00 p.a. and $300,000.00 as a brought forward figure per person. That makes it $600,000.00 in total for a couple. That's a $480,000.00 difference compared to the current contribution limits per couple which is considerable.
This is a massive difference and my view is that Government and Treasury still want Superannuation to be the preferred entity for retirement savings but by reducing these limits, they can score some taxes from non-super entities. That's just me being a bit cynical.
So if you are in a position where you have a lump sum up to the $1,080,000.00 cap and want to discuss if this contribution type is right for you then you'd better get cracking because this window is closing soon.