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.
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