Planning for retirement is one of the most significant financial steps you’ll take in life. After all your hard work, you deserve to enjoy your retirement with as much financial freedom as possible. Here’s some good news that could put more tax-free money in your pocket.
From 1 July 2025, the amount you can transfer into a tax-free retirement account will increase to $2 million.
Why is this happening?
The transfer balance cap (TBC) is the maximum amount you can move into a tax-free retirement account. It’s tied to the Consumer Price Index (CPI), and when inflation rises, the cap increases in $100,000 increments at the start of a new financial year. With the latest CPI data from December 2024, the cap is set to jump from $1.9 million to $2 million.
What does this mean for you?
Everyone has their own personal transfer balance cap, and how much this increase benefits you depends on your situation:
- This could be a unique opportunity if you haven’t started drawing a retirement income stream. Starting your retirement income stream in June 2025 would lock your cap at $1.9 million. But if you wait until July 2025, your cap increases to $2 million – giving you an extra $100,000 tax-free.
- The increase will only apply to your unused cap space if you’re already receiving a retirement income stream. You may not receive the full $100,000 increase, but there could still be room to grow your tax-free retirement savings.
How to check your personal cap
Your super fund reports your balances to the Australian Taxation Office (ATO). You can view your personal transfer balance cap, available cap space, and transaction history anytime through the ATO portal on myGov.
Maximise your retirement savings
Understanding the rules around your transfer balance cap can help you get the most out of your retirement. If you plan to retire soon, the upcoming cap increase is a rare chance to boost your tax-free super.
If you’re unsure how this applies to you or want to explore the best strategy for your situation, we’re here to help. Contact our team today to make the most of your retirement savings.