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Transition to retirement (TTR) strategies are a great way to boost your super savings while you’re working. And with the end of the financial year fast approaching, it’s a great time to start making smarter decisions about your money.
If you’re already using a TTR strategy, make sure you review this before 30 June to avoid paying any unnecessary tax and to ensure you’re making the most of your opportunities.
What’s happening?
On 1 July 2014, the cap on concessionally taxed super contributions will increase from $25,000 to $35,000 if you are aged 49 or over on 30 June 2014*. Also, the Government has proposed deferring the increase in the Super Guarantee (SG)contribution rate from 9.25% to 9.5%** until 1 July 2016
Should you do anything before 1 July?
Leading up to the end of the financial year, we encourage you to talk to us about how you can make the most of the current concessional contribution cap* that yourcashflow allows.
By doing the most you can now, you can reduce the amount you pay in tax and significantly boost the amount of savings you’ll have to retire on so you can enjoy the retirement you’ve always imagined for yourself.
What about after 1 July?
If you are eligible for the higher cap of $35,000, you may want to increase your concessional contributions and draw more from your TTR pension to replace the extra money you contribute.
You will also, need to make sure you keep an eye on any SG rate increases, as these increased contributions also count towards your cap.
If you’d like more information on how to effectively plan for the retirement you want, please contact on . We’ll review your retirement plans and help you work towards achieving a brighter financial future.
* Concessional super contributions currently are capped at $25,000 pa, for people aged 58 or under on 30/6/13 and $35,000 for people aged 59 or over on 30/6/13. From 1 July 2014, the general concessional cap will be increased to $30,000. For people aged 49 and over on 30/6/14, their concessional cap will be $35,000 from 1 July 2014.
** if this is not law by 1 July 2014, the SG rate will increase as currently planned to 9.5% on 1 July 2014)..
This document contains general information only. Mohamed Said is not a registered tax agent. Any advice given is general only and has not taken into account your objectives, financial situation or needs. Because of this, before acting on any advice, you should consult a financial planner to consider how appropriate the advice is to your objectives, financial situation and needs. This information is based on our interpretation of relevant superannuation, social security and taxation laws as at 20 March 2014.
