Retirement Strategies
Transition to Retirement Strategies
A Transition to Retirement Strategy involves the following:
1. Salary Sacrificing a large portion of your wages from employment into superannuation to take advantage of the tax benefits
2. Converting the majority of your superannuation funds into an Allocated Pension
3. Drawing a tax free pension from the Allocated Pension to replace the reduction in your after tax wages
This strategy takes advantage of a retirement income stream called a non-commutable allocated pension. This strategy can have a number of benefits for people over superannuation preservation age including:
* Maintaining your required level of income to ensure your annual living expenses are met and lifestyle maintained.
* Minimising your tax payable
* Increasing your overall superannuation benefits prior to permanent retirement
* Gaining a better investment return by having most of your superannuation funds invested in an Allocated Pension which does not pay tax on the earnings or capital gains of the fund.