Y o u r P e r s o n a l G u i d e t o W e a l t h C r e a t i o n
Make the most of transitioning to retirement
As of July 1 2014, there have been some changes to the concessional superannuation contributions cap, which is welcome news to the over 55s.
The higher $35 000 concessional superannuation contributions cap, which was previously only available to people over the age of sixty, has now been extended to anyone over the age of fifty. This means that the taxation benefits of the transition-to-retirement scheme just got a little bit more enticing!
The transition to retirement scheme allows Australians over the age of 55 to begin drawing a pension from their superannuation, regardless of whether or not they have changed their working arrangements. The scheme is designed to allow people to slowly ease into retirement, without suffering a decrease in their weekly income.
However, financially savvy over 55s can do extremely well out of this situation if they continue to work the same hours that they were before their superannuation became available to them.
By salary sacrificing the full concessional contributions cap (up to $35 000) and replacing the lost portion of income with a pension paid from your superannuation fund, you can make some impressive savings on your tax bill.
For Australians under 60, this superannuation pension is taxed at a concessional rate, and for those over 60 it is completely tax-free. People under the age of sixty should sit down with their accountant to calculate the exact amount that they should draw from their super to maximise tax savings.
Not all super funds offer transition to retirement, so if you are interested in taking advantage of this scheme you should check to see if your fund is participating. If you are a member of an SMSF, you will need to confirm that your fund’s deed allows for transition to retirement pensions.
Susan Flux, Brisbane
Since that time I known Tony and his team at Lee and Lee, they have provided me with outstanding advice and services regarding my personal, family and especially my SMSF borrowing setup for wealth creation and tax reduction strategies that have since led to financial independence.
I now very clear and feel confident on my future financial goals and taxation strategies and know they can be achieved with Tony's expert and professional help.
Shukri Barbara, Property Tax Specialists Sydney
Tony has impressed me with his technical knowledge and execution. He works with honesty and integrity and is generous in his dealings.
John Mu, Internet Marketing Strategist Gold Coast
Tony has the strategies which are helping me legally minimise tax. He has helped me in my personal development and wealth creation to build a multimillion dollar property portfolio.
If you want a hands-on accountant who knows his stuff...Tony Lee is the man!