In recent weeks, the media has been overrun with commentary about what the 2016 federal budget may contain in relation to superannuation.
Over the past ten years a popular strategy employed by many Australians has been affectionately referred to as 'Transition to Retirement' (TTR) whereby persons still working are able to access between 4% and 10% of their superannuation account balance per annum. This is typically coupled with a salary sacrifice arrangement to replace the drawings from the fund and reduce the overall income tax liability.
Firmly in the headlights is the Transition to Retirement strategy with media commentary suggesting that this strategy may be in the firing line for change, or even abolition, in the budget.
We spoke with Lewis Clelland from Corso Private Wealth; he commented "whilst salary sacrificing will still be available, there is a very real chance the government will close the door to new participants of the pre-retirement TTR strategy thereby only allowing access to superannuation monies when a person has fully retired"
Additionally Lewis said "In the past the majority of changes to superannuation apply prospectively and any existing arrangements are typically grandfathered. Therefore clients who are currently undertaking this strategy should be able to continue to do so – of course there are no guarantees when it comes to government policy". Read more…