This year will be the first indexation increase of the $1.6 million pension limit.
If you’re nearing retirement and have a large amount in your transfer balance account, it may be wise to take advantage of this after 1 July 2021 due to the pension transfer cap increase from $1.6 million to $1.7 million.
At the time you first commence a retirement phase superannuation income stream, your “personal transfer balance cap” is set at the general transfer balance cap for that financial year.
When the general transfer balance cap is indexed to $1.7 million from 1 July 2021, there won’t be a single cap that applies to all individuals. Rather, every individual will have their own personal transfer balance cap of between $1.6 million and $1.7 million.
Each calculation will be dependent on member balance in each superannuation account and pension start date.