Press Release

Baby boomers could potentially boost their retirement savings by thousands of dollars if they accumulated superannuation benefits in the early 1980's.

A new tax incentive introduced by the Federal Government will allow superannuation benefits that relate to the period before July 1, 1983 to become tax free from July 1, 2007.

From July 1, tax will still be payable on superannuation payments made to individuals aged less than age 60, but the tax calculation will be simplified. All lump sums will be divided into two components - tax free and taxable.

The amount that represents the pre-July 1, 1983 component will be included in the tax free component of your superannuation benefit, while the amount relating to the post-July 1, 1983 component will in the taxable component.

"If you started working before July 1983, you might have a pre-1983 component of your super," said Justin Sadler, the national sales and marketing manager for leading self-managed fund expert, Super Concepts.

"This component will be crystallised to a fixed amount, based on its value as at June 30,2007."

If the pre-1983 component was spread over multiple superannation funds, it might be worth consolidating them, Mr Sadler advised.

"Consolidating your super might mean a larger proportion is identified as pre-1983. Before you consolidate, however, check with your financial planner that you won't be missing out on any benefits offered by one of your funds."

To maximise tax savings, Mr Sadler said people could make additional contributions to theor pre-July 1983 fund before June 30.

"This is a fantastic opportunity to boost your superannuation fund and ensure that your retirement will be financially stress-free," he said.

END.