Warning to Pre-retirees

Last chance for $540,000 non concessional (NCC) Super top up.

This financial year is the last chance to take advantage of the current non-concessional contributions cap limit and the 3 year bring forward rule.

Why is this such a big deal?

If you have money sitting outside super (say you have just sold a property or received an inheritance) and you want to get it into super then this year may provide you with more favourable levels to do so.

The annual non concessional (NCC) cap is $180K and the three year bring forward rule allows you to contribute up to three years’ worth in one hit (3 x $180K = $540K) this is available to eligible members under 65 years of age.

In last May’s budget the government announced a number of significant changes to superannuation. These announcements just passed royal assent on the 29th November 2016 and so the NCC limit has been lowered to $100K pa (or 3 years’ worth at $300K).

While anyone under age 65 can contribute $540,000 during 2016/17 in full (provided you have not triggered in the previous 2 years) this will be different if you don’t make the full $540K NCC in 2016/17.

Let’s look at an example: if you are 60 years of age and contribute NCC of $200K in 2016/17 rather than being able to top up the balance of $340K over 2017/18 and 2018/19 you will only be able to put in a further $180k. If you do not utilise the full $540K this year then this drops to $380K in total (ie $180K this year then $100K each the remaining 2 years).

Confused? Then give us a call. Do not leave this strategy to the last minute as June 30 will be here before you know it.

General Advice Warning - This communication has been prepared on a general advice basis only. The information has not been prepared to take into account your specific objectives, needs and financial situation. The information may not be appropriate to your individual needs and you should seek advice from your financial adviser before making any investment decisions.