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Top tips for financial advisers this EOFY

BT has compiled the top five tips for financial advisers heading into this EOFY based on frequently asked questions from advisers this June quarter.

The indexation of superannuation caps and thresholds and the qualifying age for the age pension increase have been identified as some big talking points by the financial services company.

The tips include:

  1. Prepare for indexation from 1 July

“Watch out, in particular, for some tricky figures when calculating your client’s eligibility to make a bring-forward contribution,” BT technical services consultant, Tim Howard, said.

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“For instance, from 1 July 2021, clients will need a total super balance of less than $1.48 to make a full $330,000 bring-forward contribution, and less than $1.59m to make a two-year, $220,000 bring-forward contribution.”

  1. Consider downsizer contribution as part of tax planning

Mr Howard said older Australians who have sold their main residence may be considering making a downsizer contribution as part of their retirement and tax planning.

“Clients are looking to use this measure as a way to boost their retirement savings,” he said.

“Going forward, eligible individuals could be continuing to work through their early sixties – although there is no requirement to be working – and also capitalise on the booming property markets across the country.”

  1. Keep an eye on the passage of the bring-forward contributions legislation

A bill to change the eligibility age for making a bring-forward contribution from less than 65 to less that 67 is currently in the Senate and, if passed, will come into effect from 1 July.

“Keep in mind there is a somewhat related measure from the 2021 Federal Budget that may benefit clients in this difficult position,” Mr Howard said.

“It has been proposed that the work test won’t apply to non-concessional contributions from 1 July 2022 for those ages 67 to 74. Should this become law, a non-working retiree who has missed their bring-forward window could potentially contribute up to the general non-concessional cap of $110,000 each and every year, up to age 74.”

  1. Check if your client is eligible for the Pension Loans Scheme

The government-announced increase to the flexibility of the PLS, which comes into effect on 1 July 2022, provides a no negative equity guarantee and provides immediate access to lump sums.

  1. Make arrangements for opt-in of fees

From 1 July, advisers will be required to obtain annual client consent for ongoing fee arrangements for all clients and should ensure to have the administrative processes in place to meet that requirement.

Top tips for financial advisers this EOFY
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