Insights
Threshold for Tax-Free Retirement Super Increases
The amount of superannuation that can be transferred into a tax-free retirement account will increase to $2 million on 1 July 2025, up from the current $1.9 million.
This change is a result of indexation based on the Consumer Price Index (CPI), which adjusts the general transfer balance cap (TBC) in $100,000 increments when inflation rises.
For those planning to retire, this increase provides a one-off opportunity to maximise tax-free retirement savings.
How the Transfer Balance Cap Works
The transfer balance cap (TBC) determines how much superannuation can be transferred into a tax-free retirement phase account. From 1 July 2025, the cap will increase from $1.9 million to $2 million, allowing retirees to allocate more funds to a tax-free environment. This change offers an opportunity for those approaching retirement to optimise their superannuation strategy.
Transfer Balance Cap Increase: Key Dates & Benefits
| Retirement Start Date | Cap Limit | Tax-Free Increase |
|---|---|---|
| Before 1 July 2025 | $1.9 million | No additional amount |
| On or after 1 July 2025 | $2 million | +$100,000 tax-free |
Who Benefits from the Transfer Balance Cap Increase?
The full $100,000 increase only applies if:
- You haven’t started a retirement income stream before 1 July 2025.
- You still have available cap space to transfer into a tax-free retirement account.
If you have already started a retirement income stream, you may only receive partial indexation, depending on how much of your cap has already been used.
How to Check Your Personal Transfer Balance Cap
| Step | What to Do |
|---|---|
| 1. Log in to myGov | Go to the myGov website and log in to your account. |
| 2. Access ATO Services | Select “Australian Taxation Office (ATO)” from your linked services. |
| 3. Check Transfer Balance Cap | View your personal transfer balance cap, available cap space, and past transactions. |
Key Takeaway: Plan for the Transfer Balance Cap Increase
With the increase to $2 million, delaying the start of a retirement income stream until after 1 July 2025 could maximise your tax-free retirement savings. If you’ve already reached your cap, this adjustment won’t apply retroactively, but those still planning their transition can take advantage of the higher limit. Reviewing your superannuation structure, investment strategy, and contribution timing is essential.
💡 Retirement Planning: What You Should Do Next
✔ Assess your superannuation balance to determine if you can benefit from the TBC increase.
✔ Consult a financial adviser to explore strategies such as delaying pension commencement for a higher tax-free allocation.
✔ Review your retirement timeline to align with the upcoming changes.
✔ View your balance cap via myGov or speak with a superannuation expert.
Want tailored advice?
With the threshold for tax-free retirement super increasing, now is the perfect time to reassess your retirement strategy. Understanding how these changes impact your superannuation can help you maximise your benefits and secure a more comfortable future. Modoras is here to guide you with personalised financial planning, expert investment advice, and ongoing education—so you can make the most of your retirement savings with confidence
Get in touch today to explore your options.
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Planning for the future comes with challenges, but understanding key financial strategies can make all the difference. In my upcoming webinar, “The Big Issues People Have with Planning Their Future: Why They Are Important and How We Solve Them,” I’ll walk you through common pitfalls and how to avoid them—including how the tax-free retirement super cap increase could impact your financial plans.
Date: 25 February, 2025
Time: 7:00 PM – 8:00 PM (AEDT)
How to Register:Click here to secure your spot.
By understanding these changes and planning ahead, you can take control of your financial future with confidence. Don’t miss this opportunity to gain expert insights and actionable steps to secure your long-term financial success.
This blog has been prepared by Modoras Wealth Management (VIC) Pty Ltd ACN 145 368 869, a Corporate Authorised Representative (No. 383940) of Modoras Pty Ltd ABN 86 068 034 908 an Australian Financial Services and Credit Licences (Number 233209), located at Level 3, 50-56 Sanders St, Upper Mt Gravatt Q 4122. The information and opinions contained in this fact sheet are general information only and is not intended to represent specific personal advice (Accounting, taxation, financial, insurance or credit). No individuals personal circumstances have been taken into consideration for the preparation of this material. Any individual making a decision to buy, sell or hold any particular financial product should make their own assessment taking into account their own particular circumstances. The information and opinions herein do not constitute any recommendation to purchase, sell or hold any particular financial product. Modoras Wealth Management (VIC) Pty Ltd recommends that no financial product or financial service be acquired or disposed of or financial strategy adopted without you first obtaining professional personal financial advice suitable and appropriate to your own personal needs, objectives, goals and circumstances. Information, forecasts and opinions contained in this fact sheet can change without notice. Modoras Wealth Management (VIC) Pty Ltd does not guarantee the accuracy of the information at any particular time. Although care has been exercised in compiling the information contained within, Modoras Pty. Ltd. does not warrant that the articles within are free from errors, inaccuracies or omissions. To the extent permissible by law, neither Modoras Wealth Management (VIC) Pty Ltd nor its employees, representatives or agents (including associated and affiliated companies) accept liability for loss or damages incurred as a result of a person acting in reliance of this publication.
