If you transfer more than $1.7 million, you'll generally be liable to pay 15% tax (or up to 30% tax if you've gone over before) from the day you go over the transfer balance pension cap. You'll have to take the excess money out of your pension account; your options for doing this depend on the type of account you have.
If you exceed the cap, you are liable to pay tax on the excess transfer balance earnings (excess transfer balance tax). You also need to transfer any excess to a super accumulation account or withdraw it as a lump sum.
From 1 July 2017, if your total super balance is below the general transfer balance cap ($1.6 million from 2017–18 to 2020–21; $1.7 million from 2021–22) at 30 June of the previous financial year, you will be eligible for the annual non-concessional contributions cap ($100,000 from 2017–18 to 2020–21; $110,000 from ...
If you have a total super balance greater than $1.7 million, you are no longer eligible to make non-concessional contributions. Any non-concessional contributions you do make will be added to your taxable income and taxed at your marginal rate.
On 1 July 2023, the general transfer balance cap will be indexed. Individuals will have a personal transfer balance cap between $1.6 and $1.9 million based on the highest ever balance of their transfer balance account between 1 July 2017 and 30 June 2023.
Excess transfer balance earnings will continue to accrue until your transfer balance is equal to or less than your personal transfer balance cap. You will pay excess transfer balance tax on those earnings.
you must be under 75 years of age. your super balance must be less than $1.59 million. If your super balance is less than $1.48 million, you can bring forward three years of caps to a maximum of $330,000.
Yes, provided you have reached the Age Pension age, you may be eligible for the Age Pension even if you have super savings.
If you're aged 60 or over and withdraw a lump sum: You don't pay any tax when you withdraw from a taxed super fund. You may pay tax if you withdraw from an untaxed super fund, such as a public sector fund.
If you're a dependant of the deceased, you don't need to pay tax on the taxable component of a death benefit if you receive it as a lump sum. Don't include it on your tax return as income.
Understand how much you can contribute
There are limits on how much you can pay into your super fund each financial year without having to pay extra tax. These limits are called 'contribution caps'. You can contribute up to $110,000 each year in non-concessional contributions.
It showed there were about 300,000 Aussies with more than $1 million in superannuation in 2019, and about 100 with more than $50 million. But, according to the graph, one superannuation fund had accumulated a staggering balance of more than $544 million.
This obviously depends on what annual income you want to fund but if you want to be able to afford a comfortable retirement—which is an income of just over $48,000 a year for a single according to the ASFA Retirement Standard—then you need a balance of at least $500,000.
With $1.7 million, you cannot make any non-concessional (or after-tax) contributions. Assuming you are over 67 but under 75, and you satisfy the work test, you could make a total concessional contribution each of $27,500, but that is all.
According to ASFA, the median super balance for those aged 25-29 was $25,173 for men and $21,774 for women as of June 2019. Balances increased to $165,587 for men and $122,228 for women for those aged between 45-49, and peak at $464,565 for men and $403,268 for women at ages 70-74.
The amount needed for retirement will be different for everyone, but for most people $2 million will be more than adequate. Here's a simple example of how a person could utilise that $2 million dollar amount over a 30-year period (60 to 90 years-old):
Assume, for example, you will need 65 per cent of your pre-retirement income, so if you earn $50,000 now, you might need $32,500 in retirement.
How much super you'll need in retirement depends on the lifestyle you want. According to the government's MoneySmart website, if you own your home, the rule of thumb is that you'll need two-thirds (67%) of your current income each year to maintain the same standard of living.
WILL ACCESSING MY SUPER AFFECT MY CENTRELINK PAYMENT? If you withdraw money from your super fund, you must tell Centrelink within 14 days. Money withdrawn from super is not treated as income for a person receiving a social security payment.
If your super provider allows it, you may be able to withdraw some or all of your super in a single payment. This payment is called a lump sum. You may be able to withdraw your super in several lump sums. However, if you ask your provider to make regular payments from your super it may be an income stream.
Super guarantee (SG) increase
From 1 July 2023, the super guarantee increases from 10.5% to 11%. Further increases of 0.5% are scheduled each financial year until 2025 when the rate reaches 12%.
Maintaining the increase to the super guarantee
The Federal Budget in May 2023 maintained the Super Guarantee's legislated increase to 12%. From 1 July 2023, the Super Guarantee will increase to 11%. It will continue to increase by 0.5% on 1 July each year until it reaches 12% in 2025.
Positive investment option performance
The Balanced investment option, over the last 10 years to 31 March 2023, has delivered an average return of 8.71% each year for super accounts and 9.56% each year for Choice income accounts.