The Government's changes to concessional caps for superannuation will dissuade investors from making concessional contributions, but the proposals draw attention to different tax-effective ways Australians can save for their retirement, according to Chris Balalovski, head of strategic advice at Perpetual Private.
Balalovski said the concessional caps may result in members stalling on additional contributions; however individuals still had the option of putting an additional $150,000 into their superannuation annually under non-concessional contribution caps.
He said that although contributions were calculated after taxable income, they did not attract contributions tax once deposited into superannuation and might be suitable for working couples with differing levels of income.
Non-concessional contribution rules also allow for a $450,000 contribution in one year granted no other contributions are made in the following two years, under 'bring-forward' provisions.
"By using both concessional and non-concessional contribution cap rules to your advantage, it is possible to contribute a large amount to superannuation within a matter of weeks. If you also choose to borrow within your self-managed superannuation fund, then the benefits are maximised further," Balalovski said.
He said borrowing from self-managed super funds allowed members to purchase large assets that otherwise might not be affordable, although a range of additional obligations under superannuation and tax law apply.
Investing outside superannuation, such as into family or discretionary trusts, is another viable option, according to Balalovski.
"Trusts have three main benefits: asset protection, tax efficiency and estate planning. They can also be set up in a matter of days, meaning there is still plenty of time to execute this strategy prior to 30 June 2012," he said.
He said the amount of money invested, risk threshold, time horizon and family dynamics were important to consider when choosing an investment vehicle.
