Transition to Retirement

If you are 55 or older and still working, commencing a Transition to Retirement strategy will allow you to substantially increase your Superannuation entitlements.

You can contribute to Superannuation via Salary Sacrifice, and simultaneously compensate for the loss of take home income, elect to receive an account based pension from your Superannuation Fund.

What’s the affect?

  • Low Tax Rate: Any salary that you contribute to Superannuation (Salary Sacrifice) is taxed at 15%, instead of your individual income tax rate as long as all your concessional contributions fall within the current cap (over 50 years of age, maximum concessional contribution $50,000). 
  • Tax Concessions: Aged between 55 and 59, the taxable component of your account based pension (paid from your super fund) is eligible for a 15% tax offset.
  • Tax Free Income: If you are 60 or over, your account based pension (paid from your Super fund) is tax free.
  • Tax Free Investment Earnings: Investment earnings (income received and realised capital gains) from assets within your super fund used to pay your account based pension are tax free. When in accumulation phase they would have been taxed at 15%.

All of the above tax savings substantially contribute to your retirement savings. 

Please note the ability to commence a Transition to Retirement strategy is dependent on your personal circumstances and specific advice should be obtained before proceeding with this strategy.

 

Salary Sacrifice 

Not yet 55, but find you are able to save money after meeting your living expenses?

If you are earning more than $37,000pa and are saving, you can sacrifice a part or all of your earnings above $37,000 and cap your tax rate at 15%. These tax savings have a direct positive impact on your superannuation entitlements. 

  • Low Tax Rate: Any salary that you contribute to Superannuation (Salary Sacrifice) is taxed at 15%, instead of your individual income tax rate as long as all your concessional contributions fall within the current cap (over 50 years of age, maximum concessional contribution $50,000). The tax rate for personal earnings between $37,000 and $80,000 is 30% and $80,000 to $180,000 is 37%. 

Please note the ability to salary sacrifice is dependent on your personal circumstances and specific advice should be obtained before proceeding with this strategy. 

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