The media has recently speculated that there may be alterations to superannuation rules in the 3rd of May Federal Budget. It is believed they will target annual contribution caps and / or Transition to Retirement strategies for super.
What does this mean for you?
While these changes are only speculative at the moment, now may be the best time to consider making the most of any potential benefits that are available under the current rules.
This includes considering:
- Whether you should salary sacrifice into your superannuation to help reduce your tax payable and increase your retirement funds; and / or
- If you should commence a transition to retirement pension whilst you are still working to help supplement your income in the lead up to your retirement.
Rules on the transition to retirement pension
As you would expect we are quite concerned about any potential changes to superannuation tax arrangements in the upcoming Federal Budget that may have the possibility of reducing your ability to self-fund your retirement, whether it is now or into the future.
Craig Day, Executive Manger of Colonial First State, states that while more tinkering with the rules can be expected, super is still likely to remain one of the most tax-effective ways to save for retirement, so it is worth planning how to maximise it.
If you are worried about any potential changes, you should speak to your financial adviser before May 3rd and consider taking action to ensure that you can make use of the current super rules before it’s too late.