There is now another way to move money into superannuation to help fund retirement - and take advantage of the fact that earnings and pension payments become tax-free when a pension is commenced. Quasi your own "Cayman Islands" account!
Legislation has been passed for the new Downsizer Super Contribution or DSC. This gives people 65 and over who wish to downsize their home the ability to move funds into super to help fund retirement. Over 65 you normally need to be working to contribute money into super.
The DSC will not count towards the existing contribution limits but as always, there are a few traps. So who might qualify?
- The home needs to be owned for more than 10 years and not be an investment property.
- You need to be older than 64.
- Contributions need to be made within 90 days of settlement.
- The super fund has to be notified that it is a DSC.
- You can only do it once!
- Total is up to $300 000 per person.
- You can't do it if you have over $1.6m in super already.
This comes into effect from 1 July 2018 so feel free to call us to discuss if this might be something that would benefit you or a parent. There are some downsides depending on your individual situation, so please ensure that you obtain advice prior to making a decision.