Important Superannuation Update: Tax-Free Retirement Cap Increasing to $2M

Feb 20, 2025 | retirement, Superannuation

Superannuation Increase of Tax Free Threshold to $2M

By Deidre Molloy, Director TSP Accountants & Business Advisors. Connect with Deidre on Linkedin here

As Director of TSP Accountants, I want to share some significant news about upcoming changes to superannuation thresholds that could impact your retirement planning.

From 1 July 2025, the transfer balance cap – the amount you can move into a tax-free retirement account – will increase to $2 million. This $100,000 increase from the current $1.9M cap was triggered by December 2024’s CPI figures, and it presents some important strategic opportunities for those approaching retirement.

If you’re considering retiring soon, timing becomes crucial. Starting a retirement income stream in June 2025 means working with a $1.9M cap, while waiting until July 2025 gives you access to the full $2M cap – that’s an additional $100,000 you can transfer tax-free.

For those already drawing a retirement income stream, the situation is more nuanced. Any increase will only apply to your unused transfer balance cap, which means you might not benefit from the full $100,000 increase.

You can check your personal transfer balance cap, available space, and account transactions through the ATO portal via myGov. However, given the complexity of these changes and their significant impact on retirement planning, I strongly encourage you to contact us at TSP Accountants.

Our team can help you understand exactly how these changes affect your situation and identify the optimal timing for your retirement income stream. We’ll ensure you’re maximising the benefits of these new thresholds while maintaining compliance with superannuation regulations.

Don’t leave money on the table – call us on 4926 4155 or email admin@tspaccountants.com.au to schedule a consultation. Let’s work together to make the most of your retirement planning opportunities.

Deidre Molloy | BCom, CA
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