Don't get tripped up by taxes
There are some unique tax rules that affect super and retirement wealth. But there's a lot you can do to make your retirement wealth tax-efficient.
Tax can take a lot out of your retirement, so it's vital to make sure you plan your finances tax-effectively when you're preparing for or in retirement. There are a lot of specific tax rules to get your head around, but the good news is that with the right advice and the right investments, you can minimise your tax and have more left over to invest in your future.
What can you do to get the best tax outcome in retirement?
Depending on your circumstances, there are some strategies19 that can help:
If you're under 55 and still working: boost your super through salary sacrifice. It may be tax efficient and could mean that you can make a bigger after-tax investment for your retirement. If you're self-employed you may be able to contribute to super and claim the contribution as a tax-deduction.
If you're over 55 and still working: think about a transition to retirement strategy, where you work part time and contribute to super while drawing an income. You can do this through your super to grow your retirement savings without reducing your income.
If you're 55-59 and retiring: use your super to start an income stream investment. There are considerable tax advantages if you don't take your super as a cash lump sum.
If you're 60 or over and retiring: use your super to start an income stream investment. No tax is payable on earnings, you can receive unlimited tax-free income stream payments and you don't have to include the payments in your annual tax return.
