If you have a spouse and have (or are likely to have) more than $1.6 million in super, there are things you can do to improve your situation when you retire.
The $1.6 million cap
From 1 July 2017, there is a limit on how much super you can transfer to ‘retirement phase’ during your lifetime, where no tax will be payable on investment earnings.
This limit is known as the ‘transfer balance cap’ and in 2017/18 it’s $1.6 million. This cap will be indexed in $100,000 increments in line with the Consumer Price Index.
Split concessional contributions
If you or your spouse are likely to exceed this limit, you may want to consider trying to ‘equalise’ your super benefits in the lead up to retirement.
One approach to consider is to split up to 85% of your previous financial year’s concessional contributions with your less superannuated spouse.
Concessional contributions include super guarantee, salary sacrifice and personal deductible contributions, as well as certain other amounts.
Another option to consider, if you have reached your ‘preservation age’ and are permanently retired (or meet another ‘condition of release’), is to cash-out a portion of your super and arrange for the money to be contributed into your spouse’s super account.
Furthermore, if you make the contribution into your spouse’s super account and your spouse earns less than $40,000 pa, you may be eligible for a tax offset of up to $540.
Alternatively, if your spouse makes a personal non-concessional contribution into their own super account and earns less than $51,813 pa, they may be eligible for a Government co-contribution of up to $500.
We can help you decide on the strategies that work best for you – so get in touch (08) 8232 9498 and make an appointment.
Important information and disclaimer
 Preservation age is 55 for those born before 1 July 1960 and gradually increases to 60, depending on your date of birth.
This publication has been prepared by Wallis-Smith Financial Services Pty Ltd ACN 112 623 613 t/a Wallis-Smith Financial Planning, Sam Wallis-Smith & Victoria Wallis-Smith are authorised representatives of GWM Adviser Services Ltd ABN 96 002 071 749 an Australian Finanmcial Services Licensee with its registered office at 105/153 Miller Street, North Sydney NSW 2060.
Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Accordingly, reliance should not be placed on the information contained in this document as the basis for making any financial investment, insurance or other decision. Please seek personal advice prior to acting on this information.
Information in this publication is accurate as at the date of writing (July 2017). In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, the accuracy of that information is not guaranteed in any way.
Opinions constitute our judgement at the time of issue and are subject to change. Neither the Licensee nor any member of the NAB Group, nor their employees or directors give any warranty of accuracy, or accept any responsibility for errors or omissions in this document.
Any general tax information provided in this publication is intended as a guide only and is based on our general understanding of taxation laws. It is not intended to be a substitute for specialised taxation advice or an assessment of your liabilities, obligations or claim entitlements that arise, or could arise, under taxation law, and we recommend you consult with a registered tax agent.