A recent article in Business Insider shared Quantum Financial’s detailed research into the superannuation changes in Budget 2016.
(You can read the full Business Insider article here)
One of the big changes to superannuation in the 2016 budget was putting a cap of $1.6 million on the balance from which tax-free pensions can be drawn.
This effectively gets rid of multi-million dollar accounts spitting out hundreds of thousands of dollar a year in tax-free income during retirement.
However, this doesn’t mean the extra cash sitting in accounts greater than $1.6 million just disappears. The money can stay in super and benefit from the concessional 15% tax rate.
From age 60, anyone can take a take free income stream from their super account. The changes just limit the amount which creates that pension.
At $1.6 million, the minimum pension payable is 4% ($64,000 a year) and the maximum 10% ($160,000).
(You can read the remainder of the Business Insider article here)