Transition to Retirement Strategies still worth it? | Summary and Q&A

TL;DR

Despite recent changes in superannuation law, a transition to retirement strategy can still offer tax savings and supplement income for living expenses.

Key Insights

• 🚕 Transition to retirement strategies can still offer tax savings and supplement income for living expenses.
• 🤕 Pension payments over the age of 62 in superannuation remain tax-free.
• 🉐 Individuals under age 60 may be subject to taxation on pensions, but there are still advantages to starting a transition to retirement strategy before turning 60.
• ☠️ Recent changes in superannuation law have impacted the tax rates for transition to retirement pension payments.
• 📞 The ability to salary sacrifice and receive a concessional contribution remains beneficial for individuals considering a transition to retirement strategy.
• 🥺 It is important to make strategic financial decisions leading up to retirement to maximize savings and minimize tax burdens.
• 🖐️ Compounding interest plays a significant role in the longevity of retirement savings.

Transcript

g'day and welcome to this week's video this week we're going to consider whether a transition to retirement strategy is still worthwhile or not now given the substantial changes that were seen in superannuation law and the government Ozzie is chasing more revenue you know from superannuation given it's such a big large pot it's worthwhile just to t... Read More

Questions & Answers

Q: What are the two main benefits of a transition to retirement strategy?

The benefits are tax exemptions on earnings from assets and the ability to receive income to supplement living expenses.

Q: Are pension payments over the age of 62 tax-free?

Yes, pension payments in superannuation over the age of 62 are still tax-free.

Q: Are pensions taxable for individuals under age 60?

Yes, pensions for individuals under age 60 are taxable at the marginal tax rate but can also be subject to a 15% tax rebate.

Q: Is there still an advantage to starting a transition to retirement strategy before turning 60?

Yes, starting a transition to retirement strategy before turning 60 allows for tax advantages on contributions made with non-concessional after-tax dollars and the ability to reduce the overall tax burden.

Summary & Key Takeaways

• The main benefits of a transition to retirement strategy are tax exemptions on earnings from assets and the ability to receive income to supplement living expenses.

• Pension payments over the age of 62 in superannuation are still tax-free.

• For individuals under age 60, pensions are taxable at the marginal tax rate, but there are still advantages to starting a transition to retirement strategy before turning 60.