Changes to Superannuation from 1 July 2021

TL;DR

Starting from July 1, there will be an increase in the superannuation guarantee payment, with further increases over the next four years, and the limit for contributions into superannuation will also increase.

Transcript

g'day and welcome to this week's video my name is ashley rowan and i'm a financial planner with consulting private wealth in today's video we're gonna have a quick chat about some of the changes being introduced in july 1 this year and these changes have to do with contributions into superannuation before we get into it just a quick disclaimer to s... Read More

Key Insights

• ❓ The superannuation guarantee payment is increasing gradually from 9.5% to 12% by 2025.
• 🔒 Increasing contributions to superannuation can significantly impact retirement savings and provide more financial security.
• 👻 The increase in limits for concessional and non-concessional contributions allows individuals to maximize their superannuation savings.

Questions & Answers

Q: What is the superannuation guarantee payment and how is it changing?

The superannuation guarantee payment is what employers contribute to their employees' superannuation funds. It is currently set at 9.5% but will increase to 10% from July 1, with further increases over the next few years.

Q: How will the increase in superannuation guarantee payments affect retirement savings?

The increase in superannuation guarantee payments can make a substantial difference in retirement savings. For example, a 40-year-old with $150,000 in superannuation today and a salary of $80,000 per year can expect their superannuation fund balance at retirement to increase by approximately $60,000.

Q: What are concessional contributions and how are they changing?

Concessional contributions include employer contributions and salary sacrifice contributions. The current limit for concessional contributions is $25,000 per year, but it will increase to $27,500 per year from July 1.

Q: What are non-concessional contributions and how are they changing?

Non-concessional contributions are personal contributions to superannuation that are not tax-deductible. The current limit for non-concessional contributions is $100,000 per year, but it will increase to $110,000 per year from July 1.

Summary & Key Takeaways

• Superannuation guarantee payments, currently set at 9.5%, will increase to 10% from July 1, with further gradual increases up to 12% by July 1, 2025.

• Concessional contributions to superannuation, including employer contributions, will increase from $25,000 to $27,500 per year.

• Non-concessional contributions, which are not tax-deductible, will increase from $100,000 to $110,000 per year.