From 1 July 2025, the transfer balance cap — the maximum amount you can move into a tax-free retirement (pension) account — will rise from $1.9 million to $2 million.
This change is thanks to the Consumer Price Index (CPI), which is reviewed each December. When inflation reaches a certain point, the transfer balance cap is indexed in $100,000 increments at the start of the new financial year. The December 2024 inflation data has now triggered this $100,000 increase.
What’s the Transfer Balance Cap?
It’s the limit on how much superannuation you can transfer into the retirement phase where earnings are tax-free.
But there’s a catch: each person has their own individual cap. If you’ve already started a retirement income stream, indexation only increases the unused portion of your cap.
Retiring in 2025?
If you’re planning to retire soon, timing is crucial. Here’s why:
- Start your pension before 1 July 2025, and your cap is $1.9 million
- Wait until on or after 1 July 2025, and your cap becomes $2 million
That’s $100,000 extra you could transfer into a tax-free retirement account — just by holding off a little longer.
Already Drawing a Pension?
If you’ve already started drawing a retirement income:
- The indexation applies only to your unused cap
- You may not get the full $100,000 increase
How Do I Check My Personal Cap?
You can find your transfer balance cap, available cap space, and account history through the ATO’s portal on myGov.
Tip: If you have a self-managed super fund (SMSF), make sure your reporting is current to avoid errors in your transfer balance account.
Need help planning your retirement strategy or understanding how this impacts your super? Get in touch — we’re here to help.
