Despite some uncertainty about how Governments will tax superannuation in the future, it still remains the most concessionally taxed vehicle to hold investments. Even if some of these concessions are eroded in the future, it will still remain a better option than holding investments in your own name. As such, we would continue to encourage all clients to maintain a focus of building their superannuation benefits up with either one off or consistent contributions to ensure that you can maintain a lifestyle in retirement that will allow you to do the things you want to do and in a manner that you desire.
To this end we would remind you that the contribution rules are as follows:
Concessional Contributions (being contributions that either you or an employer is seeking to claim a tax deduction on)
• If 49 years old or over on 30 June 2014 – $35,000
• If under 49 years on on 30 June 2014 – $30,000
# If 65 years or over then must satisfy the work test. The work test is essentially that you must work for reward for at least 40 hours in a 30 day consecutive period. Once this work test has been satisfied then you are able to make the contribution.
Non Concessional Contributions (being personal after tax contributions)
• If under 65 years of age – $180,000 per annum
• If 65 years of age to 74 years old – $180,000 per annum provided satisfied work test
. • If 75 years of age or older – $Nil
# If under 65 years of age you may use the “bring forward” rule. This rule allows you to contribute up to $540,000 in one year but then prohibits you from making any further contributions in the 3 year period. This can be very useful where contributing a lump sum upon retirement, contributing a lump sum from the sale of an asset or when using a withdrawal and re-contribution strategy.