The financial services industry is preparing for what promises to be one of the biggest years in the history of superannuation. 30 June 2007 however will see the end of many once only opportunities that will not be available following this time.

The good news is that some have already benefited from the current transitional rules and there is still enough time to review your super and retirement strategy if you start planning and action this now.

The government announced it will allow members of super funds to contribute up to $1.0M of undeducted contributions between 10 May 2006 and 30 June 2007.  Listed are the key benefits and some issues to consider to maximise the opportunities available in the new super environment.

KEY BENEFITS

Contribute up to $1.0M of undeducted contributions to your super fund ($2.0M per couple)

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Benefits available after age 60 and retired:

 

- The income of the super fund is not taxed

 

- Lump sum payment from super is tax free

 

- The pension income is tax free

 

- The $1.0M undeducted contribution can be accessed tax free

 

- Removal of limits on amounts held in super

FUNDING YOUR CONTRIBUTION

Some funding alternatives to consider include:

Cash contribution

Transfer or sale of an investment

Gearing an existing asset (use available equity in assets)

Estate or family settlement

Sale of business

OTHER CONSIDERATIONS

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Compare your future asset and income position where you invest the same amount through super to outside super

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Consider increasing or transferring your life insurance to super

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Compare your future asset and income position where you invest the same amount through super to outside super 2007 marks the beginning of a new era in superannuation and retirement strategies and whilst most people will benefit from the changes, it is important to review your situation well before 1 July 2007 to assess how these changes will affect you.

So that you can be fully informed of the strategies available to you, please speak with your Accountant or Financial Adviser

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