The Transfer Balance Cap (TBC) is a limit set by the Australian government on the amount of funds that can be moved from an individual’s accumulation superannuation account into their retirement phase pension account. The TBC was introduced in 2017 as part of the government’s superannuation reforms and was initially set at $1.6 million.

Recently, the government has announced that it will be increasing the TBC indexation rate from 1 July 2023 by $200,000 to $1.9m, ensuring that the cap remains relevant and in line with inflation.

This increase in the TBC indexation rate will have a significant impact on those approaching retirement. It will allow individuals to continue to grow their retirement savings and maximise their standard of living, even as inflation erodes spending power.

However, it is important to note that the TBC increase will not apply retrospectively. For those who have reached their TBC limit, prior 1 July 2023, will not be entitled to any of the increase.

It is important for individuals to stay informed about their TBC and any changes to superannuation regulations, so they can make informed decisions about their retirement savings and ensure that they are making the most of their superannuation benefits.

 

How Can Alto Help?

Alto can help you understand your TBC position and how this impacts your superannuation fund’s tax position.

Author: Scott Coghlan