Aussies urged to exploit fleeting super caps

The government’s decision to maintain the current $180,000 non-concessional contributions cap until 30 June next year means Australians must capitalise on this final opportunity to top up their super balances, experts say.

HLB Mann Judd Sydney head of wealth management Michael Hutton has urged Australians to consider their super balances before it’s too late.

“This current opportunity to maximise non-concessional contributions under the current system represents a superannuation contribution opportunity of a magnitude not seen since the 2007 financial year, when the government allowed everyone a “one-off” non-concessional contribution limit of $1 million,” Mr Hutton said.

“For those with more than $1.6 million in superannuation, this may be their last opportunity to make non-concessional contributions to their superannuation fund. On the other hand, those with little or no superannuation have the opportunity to make a substantial start on their retirement savings.”

From 1 July 2017, the government will implement an annual non-concessional contributions cap of $100,000, or $300,000 brought forward over three years, which will only be available to those with super balances less than $1.6 million.

“Government changes in recent years have made the old approach, of topping up super in the last 10 years before retirement, virtually impossible. While we used to talk to clients about focusing on superannuation when they were in their fifties, we are now having these conversations when clients are in their thirties,” Mr Hutton said.

“It is increasingly difficult to put large sums of money into superannuation so people really need to a find way to put smaller sums in, more frequently, early in their working life.”

However, while those restrictions may come as unwelcome news to superannuants, Mr Hutton says the super system will remain the most attractive retirement vehicle.

“There is no other investment opportunity that allows 15 percent tax while accumulating, is tax free when paying a pension, has a strong investment structure and regulations and provides asset protection,” he said.

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