Page 10 - Wealth-Adviser-Issue-122 (FWP)

ISSUE 122
OCTOBER 2025
Ask a guide trustees but they retain discretion. Binding nomi-
There are three main types: Non-binding nominations
Q&A: Question nations legally require trustees to follow your instructions
if valid – these can be lapsing (expire after three years) or
non-lapsing (remain valid until changed). Reversionary
nominations for pension accounts automatically continue
payments to your nominated beneficiary.
Research shows claims with valid nominations are
Question 1 processed faster. Major life events like marriage, divorce,
I keep hearing about superannuation contribution caps or children can invalidate existing nominations, so regu-
being increased for 2025-26. My employer super has gone lar reviews are essential. Binding nominations generally
up to 12%, but I’m not sure if I should be making additional provide more certainty, while nominating your estate allows
contributions and what the limits are now? distribution according to your will. A financial adviser can
You’re right about the Superannuation Guarantee help determine which option suits your circumstances and
increasing to 12% for 2025-26 – the highest rate ever. ensure your nominations remain valid.
However, the contribution caps themselves haven’t changed
much this year. The concessional cap remains at $30,000 Question 3:
annually, covering employer contributions plus any salary I’m 62 and thinking about reducing my work hours in the
sacrifice or personal deductible contributions. The non-con- next couple of years. Someone mentioned a “transition to
cessional cap stays at $120,000 for after-tax contributions. retirement” strategy, how does this work and could it help
The transfer balance cap increased from $1.9 million to me ease into retirement?
$2 million, affecting pension phase transfers. A transition to retirement (TTR) strategy allows you to
Making additional contributions can be powerful for access up to 10% of your super annually through a TTR
wealth building, especially with super’s tax advantages. pension while still working. Since you’re over 60, these
However, it’s crucial to understand how these caps apply to payments would be completely tax-free.
your situation to avoid exceeding limits. A financial adviser You transfer part of your super into a TTR pension
can help develop a contribution strategy that maximises account and draw regular income to supplement reduced
wages, while continuing employer contributions to your
your retirement savings while staying within the rules.
remaining super. This potentially maintains your current
Question 2: income level while working fewer hours.
TTR can provide tax benefits if you use salary sacrifice to
I’ve been reading about the importance of updating replace the income you’re drawing from super, potentially
superannuation beneficiary nominations, but I’m not sure reducing overall tax while maintaining your super balance.
what type I should choose or if mine are still valid. What’s the However, drawing from super early means less money when
difference between binding and non-binding nominations? you fully retire, and can affect Centrelink asset testing.
Your super doesn’t automatically form part of your The strategy’s effectiveness depends on your financial
estate, so without a valid beneficiary nomination, the fund situation, career plans, and retirement goals. A financial ad-
trustee decides who receives your money, which might not viser can model different scenarios to show how TTR might
align with your wishes. work for your circumstances and help you time it effectively.

Future Wealth Planners

Level 1, 176 Main Street
Osborne Park WA 6017

P.O. Box 16
Osborne Park WA 6917

P: 08 9207 3844
W: www.fwplanners.com.au
E: clientservices@fwplanners.com.au

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