Top Tips For Financial Advisors This EOFY
The indexation of retirement ceilings and thresholds and the age of eligibility for the pension increase have been identified as important topics of discussion by the financial services company.
The tips include:
- Prepare for indexation from July 1
“Be careful, in particular, of some tricky numbers when calculating your customer’s eligibility to make an advance contribution,” said Tim Howard, BT technical services consultant.
“For example, starting July 1, 2021, customers will need a total super balance of less than $ 1.48 to make an early contribution of $ 330,000 and less than $ 1.59 million to make an advance. advance contribution of $ 220,000 over two years. “
- Consider the downsizing contribution as part of tax planning
Mr Howard said older Australians who have sold their primary residence might consider making a downsizing contribution as part of their retirement and tax planning.
“Clients are looking to use this measure as a way to increase their retirement savings,” he said.
“In the future, eligible people could continue working until their early sixties – although there is no obligation to work – and also capitalize on booming real estate markets across the country.”
- Keep an eye on the adoption of the law on advance contributions
A bill to raise the age of eligibility for early contribution from under 65 to under 67 is currently in the Senate and, if passed, will come into force on July 1.
“Keep in mind that there is a somewhat related measure in the 2021 federal budget that could benefit clients in this difficult position,” Howard said.
“It has been proposed that the work test does not apply to non-concessional contributions from July 1, 2022 for people aged 67 to 74. If this were to become law, a non-active retiree who missed their deferral window could potentially contribute. up to the general non-concessional cap of $ 110,000 each year, until the age of 74.
- Check if your client is eligible for the pension loan scheme
The government’s announced increase in the flexibility of the PLS, which takes effect on July 1, 2022, offers a non-negative equity guarantee and gives immediate access to lump sums.
- Arrange for recording costs
Beginning July 1, advisors will be required to obtain annual client consent for outstanding fee agreements for all clients and should ensure that administrative processes are in place to meet this requirement.
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