Australians can use the superannuation reforms to their advantage to boost their retirement savings, according to HSBC.
HSBC head of wealth, Scott Ellis, said while new reforms could make it more confusing for people planning their retirement, super was still one of the most tax-effective ways to save for retirement.
“There are various strategies you can implement to maximising your retirement income. These range from the relatively simple tactic of increasing concessional and non-concessional contributions this financial year, to more detailed strategies that may require help from a financial planner to implement,” Ellis said.
“While it is important to know how the new changes may affect you, this is also an opportune time to re-evaluate all of your retirement funding plans. Superannuation is only one source of income in retirement and people often have just as much wealth outside of their super as they do inside,” Ellis said.
HSBC’s Super Checklist said while the introduction of the pension account cap of $1.6 million could appear to be disadvantageous for retirees, there was an opportunity for married couples to spread their eligible income across two accounts before 30 June 2017.
This could maximise the total amount that could be invested tax-free. Singles over the new cap could consider withdrawing the excess funds in one lump sum and invest the capital elsewhere or back into an accumulation account before 30 June.
For those working and in the transition-to-retirement (TTR) phase, HSBC said they should consider rolling their TTR pension back into the savings phase of their super if they did not require the additional income from the TTR pension to supplement living expenses.
The checklist noted that people who were still saving for retirement could take advantage of the fact that after 1 July it would be possible to receive the maximum $540 tax offset from making a non-concessional contribution of at least $3,000 to the super fund of a spouse who earned up to $37,000.
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