The Australian budget announched on Tuesday will allow Australians to only contribute $25,000 a year before tax and $500,000 after tax over the course of a lifetime for their retirement superannuation fund.
The total amount of extra money people can voluntarily put into their super funds (which does not including money they salary-sacrifice) will be capped at $500,000. This was a budget saving measure that will save the Australian government budget $550 million.
The government also announched that it will also disincentize people from accumulating more than $1.6 million in tax-free super accounts. People will either have to withdraw the money from their accounts or transfer it into a separate accumulation account, where these earnings will then be taxed at 15 per cent.
These new transition-to-retirement rules will also change so people who are under the age of 65 who can only access this $1.6 million tax free before they retire. This cap will apply to everyone as well as current retirees.
The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com
SHARE THIS ARTICLE :australia budget