Starting on 1 July 2023, the General TBC is set to soar from its current $1.7 Million to a whopping $1.9 Million! But thanks to the proportional indexation approach, some individuals will see a substantial increase in the amount they can transfer into their retirement phase pensions, while others may have no change at all!
If anyone who has not yet started and will not start a retirement phase income stream before 1 July 2023, then buckle up! You’re in for a treat! You’ll get to enjoy the full glory of a whopping $200,000 increase to the TBC. But wait, there’s more! If you’ve already fully exhausted your TBC before this date, Unfortunately, the upcoming increase to the General TBC won’t personally benefit you.
For the diverse group of people in between, their TBC value will be unique to them based on their highest usage percentage. This complex minefield makes it highly unlikely for any two individuals in this cohort to have identical TBC values in the upcoming years.
In the upcoming months, unlocking the level of indexation and how it can potentially benefit individuals will be crucial in discovering the various strategy options available to them and avoiding any unfortunate setbacks that could lead to disappointing results.
For example, clients considering the commencement of their first retirement phase income stream, may be better off deferring until 1 July 2023 to lock in the maximum increase to their personal TBC.
Similarly, clients who may currently be receiving a Transition to Retirement Income Stream (TRIS) will need to remain vigilant to ensure their TRIS doesn’t inadvertently convert to a retirement phase pension before 1 July 2023.
Source: SMSF Association
