The Last Great Super Gold Rush

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Ten years ago the then Treasurer, Peter Costello, announced that one could add $1 million into their super. This was under a special transitional rule. Many people of means took advantage of that and added significant amounts into their super. We now are faced with a similar window. Between now and 30 June 2017, one can make a non-concessional contribution into super of $540,000 (if you have made other non-concessional contributions in the last few years, you will be subjected to lower transitional limits that are too complicated to explain here I'm afraid). This is under what is called the three year 'bring foward rule'. That is, if you are aged under 64 on 1 July 2016, you may be able to contribute as much as $540,000 before the end of the financial year (i.e 30 June 2017) - equal to $180,000 per annum. From next year, the non-concessional cap will fall from $180,000 per annum to $100,000 per annum. So under the new cap the maximum one can bring forward will then be $300,000. But refer to my earlier comment about the transitional rules. Why is the government doing this? Well super is a great place to have your money. The maximum tax rate on super is 15%. If you retire and start an account based income stream, then the earnings are taxed at zero per cent. The money you take out of it can also be taxed at zero per cent. So it costs the government money to offer this benefit to people of means. The message then is: consider taking advantage of the Last Super Gold Rush. Have more assets than that? Then consider Investment Bonds. Not long after the $1m Costello window closed, we had the Global Financial Crisis (what our North American friends call the Great Recession). So if people had exposure to share based portfolios, they may have suffered an initial paper loss. This highlights the importance of getting sound advice. Don't rely on this blog - it is general advice only. See a properly qualified financial adviser, so they can advise you about the limits, the investments and your total financial situation.

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