News

SMSF Trustees, Members and Retirement Planners

Both the concessional (SG/before tax) and non-concessional (after tax) thresholds are increasing from 1 July 2014 allowing you to invest more into your superannuation fund, benefit from the tax concessions on doing so and work to fund your own retirement.

Concessional caps increase from $25,000 to $35,000.
Non concessional caps increase from $150,000 to $180,000.

Also note that if you are under 65, you can make non-concessional contributions of $540,000 over a 3 year period.  For example:

Financial Year

Concessional Contribution

Non-Concessional Contribution

2013/14

 $ 35,000

 $250,000

2014/15

$ 35,000 $110,000

2015/16

 $ 35,000

 $180,000

Total

 $105,000

 $540,000

 So even though you "breach" the $180,000 non-concessional threshold in the 2013/14 financial year, you will not be penalised if you maintain the maximum 3 year limit over the total period.

With regard to the eligibility for Age Pension, Treasurer Joe Hockey announced in the 2014 Federal Budget that age eligibility will rise to age 70 by 2035.  The graduated increase scale will be:

Birth Date Pension Age
01/07/1952 - 31/12/1953 65.5 years
01/01/1954 - 30/06/1955 66 years
01/07/1955 - 31/12/1956 66.5 years
01/01/1957 - 30/06/1958 67 years
01/07/1958 - 31/12/1959 67.5 years
01/01/1960 - 30/06/1961 68 years
01/07/1961 - 31/12/1962 68.5 years
01/01/1963 - 30/06/1964 69 years
01/07/1964 - 31/12/1965 69.5 years
01/01/1966 onwards 70 years

If you consider that someone born in 1966 will have been in the compulsory superannuation regime for at least 35-40 years by age 65 they should be able to retire in a comfortable position.  However this does not allow for self-employed people who often don't put anything aside for their superannuation due to poor cashflow or needing the working capital to run their small business.  Nor does it allow for women, or men for that matter, who choose to leave and re-enter the workforce over time to have families or look after elderly relatives.

With the obvious direction shown by both past and present governments in increasing pension ages and decreasing pension supplements, it is important we all look to independently fund our retirements to continue the standard of living we desire well beyond the day we finish working.  Act now to take advantage of tax concessions and invest the money you have in superannuation with a strategy that suits your needs. 

Call Moneyplan in our office today on (03) 9489 2154 to discuss investment options.