There are significant changes to the way superannuation funds can be built and how retirement wealth can accumulated from 1 July 2017, and it may severely impact on many Australian’s ability to accumulate enough funds to retire without having to rely also on the aged pension.

For those of us over the age of 49, the present limit for before-tax contributions to super (for example employer contributions and salary sacrifice) is $35,000 and $30,000 for the younger members of society.  However, from 1 July 2017, the limit is being reduced to only $25,000.

If you are one of the Australians who presently participates in a ‘transition to retirement’ pension scheme, then the changes may mean that its no longer a financially viable option for you, due to the removal of the tax exemptions currently available on these types of pensions. 

It’s not all doom and gloom though, as there is a provision which is set to commence in 2018 which allows people to play ‘catch-up’ with their contributions if they have not utilised their capped limit in previous years.

It follows that each year that you are not using your superannuation contribution entitlement to its fullest, you are likely to be missing out on a way to build your retirement wealth that is tax-effective and which will assist you having a healthy retirement fund when the time comes.

Accordingly, it would be prudent to sit down with your accountant or financial planner to discuss your individual circumstances, and see how you can make the most of the present superannuation rules, before the new changes kick in from July 2017.

Affinity Lawyers team of Gold Coast solicitors are also well placed to provide advice on the legal structuring surrounding superannuation or SMSF.