Get Prepared Now For Superannuation Changes Which Are Coming in July 2018

by Dominique Schuh

Fading hope for "Trump reflation" was the main catalyst for the Australian share market falling the most in four months, but intensifying Chinese banking risks compounded the pressure on miners. The S&P/ASX 200 index tumbled 90.1 points, or 1.56 per cent, to 5684.5 as it followed the 1.2 per cent fall in the US S&P 500 last night, its biggest loss since November, after equity markets finally reacted to warnings President Donald Trump would struggle to implement his pro-market policies. The Australian dollar is trading at 76.78 US cents at the close Wednesday.

What this means for you:
When the mining shares in Australia drop, our whole market tends to come down for the day as well. This is because our hare market is highly concentrated with either mining-related or financial companies. Don't neglect holding some international shares to increase your exposure to other industries such as manufacturing and pharmaceuticals.

While it's still a little way off, from 1 July 2018, people with superannuation balances of less than $500,000 will be able to access their unused concessional contributions cap space to make additional concessional (before-tax) contributions. Individuals will be able to access their unused concessional contributions cap space on a rolling basis for a period of 5 years. Only unused amounts accrued from 1 July 2018 can be carried forward. This will be a handy way for people with smaller account balances to top them up where possible.