Post-1 July super changes – where are the opportunities?


Neil Rogan

Neil Rogan, General Manager for Investment Bonds at Centuria says tax-effective plans to invest savings outside of super could be the best response to recent changes.

“In line with the government’s goal to improve the fairness and sustainability of the super system, Australians with lower super balances or lower or irregular incomes will find it easier to save for retirement.

The improvements include:

• For people who have less than $500,000 in superannuation; a carry forward of unused concessional contributions for up to five years, effective 1 July 2018.
• A tax deduction for personal super contributions for most people under the age of 75 (and subject to the work test between ages 65 and 74) from 1 July 2017.
• A low-income superannuation tax offset for eligible people who have an adjusted taxable income up to $37,000, subject to certain caps.

For Australians earning higher salaries or with larger super balances, the changes will reduce their ability to use superannuation to grow their wealth due to the transfer balance cap of $1.6m.

These are major changes for wealthier Australians, may wish to consider alternatives to invest their money for the long-term in a tax efficient vehicle.

Tax-effective strategies to help grow your wealth with limits to superannuation now in place, investment bonds could be a suitable tax-effective alternative to invest for retirement and grow your wealth. With marginal tax rates on personal income as high as 45% (plus a Medicare levy of 2%), many investors are looking for new ways to invest their retirement savings or other money.

Investment bonds are simple and flexible, and offer investment options across a range of different asset classes and portfolio combinations. They are tax-free in the hands of the investor if held for 10 years, but funds can also be accessed at any time if required.”

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