We are into a new financial year and now that all the End Of Financial Year activity is complete, it is now timely to look to the future and how some of the changes effective 1st July can be beneficial.
The Changes from 1st July 2021:
- The super guarantee rate will increase from 9.5% to 12% by July 2025, starting July 1 at 10%.
- The Government will launch a new online fund comparison tool “YourSuper” on July 1, to make it easier to choose a better fund.
- The maximum number of allowable members in self-managed superannuation funds (SMSFs) and small APRA funds will increase from four to six from July 1.
- The annual concessional contribution cap (pre-tax salary sacrificed contributions to super) is increasing from $25,000 to $27,500.
- The annual non-concessional cap is increasing from $100,000 to $110,000 (after-tax savings added to super). For people aged 65 and 66, the bring-forward arrangements will be extended for all contributions made on or after 1 July 2020.
- The total super balance and the transfer balance cap are both increasing from $1.6 million to $1.7 million. If you exceed the total super balance cap then you can no longer make non-concessional after-tax contributions to super. The transfer balance cap is the maximum amount you can commence a retirement income stream with.
Increasing contributions can take advantage of compounding interest which can yield significant increases in account balances in years to come.
The long-awaited change to increase the number of members to six presents opportunities that should be considered, particularly for inter-generational funds and for estate planning.
To further investigate the implementation of any of these changes please call us on 03 98130133.
However, please understand that we at Moneta Super cannot advise on the suitability of any of the changes to individual circumstances. For that advice you need to speak with your financial adviser or any properly licenced and qualified adviser.
We have not considered your personal or financial circumstances and this information should be considered as “General” advice.