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7th September 2020 - Private Wealth
The government has increased the super contribution age to 67. This change gives everyone under 67 more time to build up their super for retirement. People aged 65 and 66, who may have been unable to contribute last year, may be able to contribute again. The law comes into effect from 1 July 2020 and naturally the normal limits to those contributions still apply.
If you think this change in legislation may have opened the door to a contribution opportunity for you, speak to your adviser.
It should be noted that the change to 67 does not affect access to super. Everyone can still take lump sums or pensions from their super money once they turn 65, regardless of their work status.
If you are aged 67 to 74 you can still contribute, but only if you have worked. To be regarded as having worked you need to have done at least 40 hours of work in not more than 30 days, in the financial year, prior to contributing.
If you are 75 or over, you can no longer make personal contributions. Your super fund can only accept mandated employer contributions on your behalf.
The other age change relates to spousal contributions. Prior to 1 July, you could only contribute on behalf of a spouse who was either under 65 or under 70 and working. These contributions can now be made for a spouse who is under 67 or under 75 and working.
One change that, at the time of writing, we haven’t had clarity on is the limits for non-concessional contributions. The cut-off for the bring-forward of three years’ contributions is currently 65. The government had proposed to make this 67 from 1 July also. However, this has yet to be voted on in Parliament.
These changes are welcomed by Elston, as anything that increases flexibility of superannuation is a benefit for older Australians. It also means that some contribution strategies that may have previously been impossible, might now be back on the table. If you feel you may be able to benefit, please seek advice from your Elston adviser.
If you would like more information please call 1300 ELSTON or contact us to speak to one of our advisers.
This material has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained in this material is General Advice and does not take into account any person’s individual investment objectives, financial situation or needs. Before making an investment decision based on this advice you should consider whether it is appropriate to your particular circumstances, alternatively seek professional advice. Where the General Advice relates to the acquisition or possible acquisition of a financial product, you should obtain a Product Disclosure Statement (“PDS”) relating to the product and consider the PDS before making any decision about whether to acquire the product. You will find further details of the service we provide and any cost to you within the Financial Services Guide. Any references to past investment performance are not an indication of future investment returns. Prepared by EP Financial Service Pty Ltd ABN 52 130 772 495 AFSL 325 252 (“Elston”). Although every effort has been made to verify the accuracy of the information contained in this material, Elston, its officers, representatives, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this material or any loss or damage suffered by any person directly or indirectly through relying on this information.
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