You might be thinking that it’s only the second week of March, however, at Hewison Private Wealth, our 12-member advice team is well and truly already focused on reviewing our client’s superannuation to ensure compliance requirements are satisfied and strategic opportunities are fully taken advantage of.
“Change” has always and I suspect always will exist in the world of superannuation. To ensure our personalised EOFY superannuation review is undertaken at the highest possible standard, which you value and expect, we need to begin early and stay ahead of the curve.
The following checklist outlines some of the general areas we’re including in this financial year’s super review.
This includes but is not limited to reaching preservation age, turning 60 or 65 years of age, changing jobs, retirement or coming into new money for example via the sale of a business or receipt of an inheritance. Changing circumstances can often provide an experienced Adviser with attractive strategic opportunities for your benefit.
The concessional contribution cap for everyone (up to 75 years of age if working), is $25,000 for the 2018/19 financial year. Recent changes have made it easier to make contributions to super and claim a personal tax deduction. Your Adviser might be on the lookout for any opportunities to make or top up your concessional super contributions which should help you accumulate more for retirement and possibly also provide a personal tax benefit.
The non-concessional cap for 2018/19 is $100,000 or upto $300,000 by utilising the bring forward rule. However, for anyone who has a ‘total super balance’ of at least $1.6m as at 30 June 2018, their non-concessional cap is reduced to zero. Those approaching 65 years of age and no longer working might soon be restricted from contributing to super, so close attention should be given to those who fall into this age bracket to assess what contribution opportunities might exist.
A key area for us is to ensure our transition to retirement or full retirement phase clients have received the required amount of pension payment for the current financial year. If a top up payment is required, this income could be called upon for lifestyle or travel costs. If pension payments are not required, various options are available such as reinvesting the monies outside super or in some cases, the pension withdrawal could be recycled back into superannuation as part of an appropriate contribution strategy. Since 1 July 2017, pension payments must be made in cash.
For some, starting a new retirement phase superannuation pension account might be appropriate. The intention here is to transfer benefits from the accumulation account where earnings are subject to 15% tax, to the tax exempt pension environment. From 1 July 2017, a Transfer Balance Cap of $1.6 million per individual was introduced as a limit on the amount of superannuation that can be transferred into the retirement phase.
Two measures introduced as part of recent Federal Budget’s (2017 & 2018) are particularly interesting to me. Although these measures essentially come into effect next financial year, both should be front of mind as part of a well-rounded strategic plan.
This is intended to allow those who have had time out of the workforce to essentially catch up on missed super contributions. You would be able to carry forward any unused concessional (deductible) contributions from 1 July 2018 if your total superannuation balance is less than $500,000 at the end of 30 June in the previous year.
From 1 July 2019, individuals aged 65 to 74 with a total superannuation balance below $300,000 will be able to make voluntary contributions for 12 months from the end of the financial year in which they last met the work test. This exemption essentially provides recent retirees with additional opportunity to accumulate super as they prepare for retirement.
The above is not intended to be an exhaustive list of the considerations or relevant to Self-Managed Superannuation Fund’s only. Your Hewison Private Wealth Adviser will be in touch with you to discuss your personal needs, objectives or circumstances in the lead up to 30 June. If you’re not a current client and would like to discuss your superannuation and retirement strategy, our experienced Advice team is here to help.
Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email firstname.lastname@example.org or visit www.hewison.com.au
Please note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.