Government Changes That Might Affect Your Retirement Plan

"Instead of showcasing the challenges of women as a group, I look to help each woman as an individual with a plan that is right for them."
-Katherine Hann
January 17, 2017

Government Changes That Might Affect Your Retirement Plan

By Katherine Hann

Government Changes That Might Affect Your Retirement Plan

Government Changes that Might Affect Your Retirement Plan

Anyone who knows me, understands that this is where I want to spend more time when I eventually retire. However, it will and should be different for each
individual. Keeping up with the changes to legislation is an important part of the information you should receive from your adviser.

Reduced caps on super contributions

    • One of the main ways Australians save for their retirement is through pre-tax or ‘concessional’ contributions to super.
    • These are the contributions made by your employer or through salary sacrificing.
    • The government is proposing a reduced annual cap of $25,000 across the board from 1 July 2017.
  • Think about making a concessional contribution to your super before 30 June 2017.

    • From 1 July 2017 the annual non-concessional contribution cap will be reduced from $180,000 to $100,000 for clients with a total super balance
      of less than $1.6m.
    •  The current cap of $180,000, or $540,000 under the bring forward rule, continues to apply until the end of 2016–17.
  • Think about making a non-concessional contribution to your super before 30 June 2017.

    What are the changes to the Age Pension assets test that will apply from 1 January 2017?

    •  The lower threshold for the asset test is increasing.
    • If you have assets over the lower threshold, your entitlement to the Age Pension will reduce.
    •  Those with greater assets could see a significant reduction in, or loss of, their age pension entitlement and those with lesser assets could
      see an increase to their entitlement.
    •  The rate at which your Age Pension reduces if your assets exceed the lower threshold is increasing from $1.50 to $3.00 per fortnight for every
      $1,000 over the threshold – this has the effect of reducing the cut-off limit where an Age Pension is no longer payable.

    My clients already know if this will affect them but you may have friends or relatives that need some advice.

    These are only a few of the legislated changes, for more information on what these changes will mean to you, contact Katherine Hann on 08 82999927.