As the end of 2017 is getting closer, it’s a perfect time for reviewing your self-managed super fund. You want to ensure that you are getting the most from your superannuation. Several rule changes were implemented in 2017. If you have a self-managed super fund, it’s vital to make the best decision to maximise your retirement. To help you with this process, we’ve come up with the top 5 tips for your self-managed super fund that you can use to help you maximise your return potential.
In 2016, parliament passed new regulations that affects how much money a person can have in the pension phase of their super fund. The new cap is set at $1.6 million, which means that if you have more money than that in the retirement phase, the tax treatment on the excess over $1.6 million is quite different. To deal with this issue, it’s important to stay inside the new super cap and commute part of your pension or even all of it.
For the 2017/2018 financial year, new concessional caps come into effect. Up to 30 June 2017, concessional contributions up to $35,000 could be made to your super fund. However, from 1 July, 2017 the concessional contribution cap for everyone has been reduced to $25,000. For married couples, it’s important to take advantage to maximise your savings.
After 1 July however, the tax benefits are not the same, which means that you may want to keep your pension in accumulation rather than drawing on it in order to receive the best tax advantages.
You may have unrealised capital gains in your self-managed super fund. If this is the case, new rules are going to affect this. You do however have a one-time opportunity to reset the CGT cost base on affected assets.
Many people opt to sacrifice part of their salary in order to make tax-effective contributions to their supers. However, as of 1 July, people can now make what’s known as a “personal concessional contributions” instead. This means that you can contribute up to $25,000 per year into your super from your own funds and claim a tax deduction. This arrangement tends to be more flexible than salary sacrifices. Note however, that the $25,000 cap includes any SGC contributions made by your employer.
A self-managed super fund is a great way to save for retirement, but it’s also essential to stay on top of the ever changing rules and regulations that affect them. Using these tips, you are better prepared to make the financial decisions that are right for your individual situation. As always, before you do anything speak to your accountant or one of the specialist advisers here at Ricarmo.