Retirement Planning
If you are at the end of your financial journey, making sure you have
all your ducks in a row is crucial.
If you are at the end of your financial journey, making sure you have all your ducks in a row is crucial. At Donmont Capital, we want to make sure that you maximise your wealth in your final years, whilst simultaneously planning for its security. We understand that this does not just mean managing your super. We also offer solutions around tax planning, estate planning, risk management as well as government benefits to give you confidence in the final step of your journey.
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What Is A Transition To Retirement Strategy
A Transition to Retirement (TTR) strategy is an approach that allows individuals who have reached their preservation age to access their superannuation benefits while continuing to work. This involves creating a TTR Pension Account where the individual is able to withdraw a minimum of 4% up to a maximum of 10% of tax-free pensions payments provided the individual is under 65 years of age. In addition to a TTR Pension Account, the individual will also need to have an Accumulation Account so that they are able to still receive Super Guarantee from their employer.
A TTR Strategy can be a great way for an individual to reduce their working hours without reducing their income or reduce their taxable income via a salary sacrifice strategy and not have their personal cashflow impacted. Please be mindful that it is important to seek advice regarding a TTR to ensure its appropriateness and maximise its utility. Get in touch with us today to see where we can help.
Income And Asset Test
In Australia, the amount of Age Pension payment an individual is entitled to receive is determined by income and assets tests.
The assets test evaluates the value of the assets you and your partner own, both within Australia and internationally. This includes property (excluding your primary home under certain conditions), vehicles, businesses, superannuation, and investments.
The income test assesses you and your partner’s income from various sources, including employment earnings, business income, investments, and superannuation. There are thresholds for how much income you can have before your pension is affected. As of my last update, for every dollar of income you earn above this threshold, your pension reduces by a certain amount
Understanding the Age Pension and incorporating this into your retirement plan can make a large difference to what retirement looks like. Due to the changing nature of these tests it is beneficial to seek advice to discuss your options to see if it is feasible to include government benefits to your retirement strategy.
Widgets – Retirement Income Strategies
Age Pension
The Age Pension is an Australian Government funded income to support retirees who meet the eligible criteria regarding residency as well as income and asset tests.
Eligible pensioners may also receive concessions on other costs such as utility and medical bills.
Superannuation Pension
A superannuation pension is a regular income stream paid from superannuation funds to the individual once they reach preservation age.
This can be derived from and Account-Based Pensions or, less commonly, Annuities.
Investment Income
These refers to income from personal investments held outside of the superannuation environment.
This could include income from an equity portfolio, term-deposit or rental property.
Due the assets being held personally, understanding the tax implications of your investment income is important to consider in retirement.
