A Guide to Retirement Withdrawals and Strategy
Unlocking Your Superannuation: A Guide to Retirement Withdrawals and Strategy
- severe financial hardship
- compassionate grounds
- terminal illness or permanent incapacity.
- permanently leaving Australia
- Your retirement income - Be sure to consider and plan for your retirement income without the safety net of superannuation.
- Tax you may need to pay - To minimise the impact on your retirement savings and potential tax, only withdraw what is absolutely necessary. If you are close to turning 60, it might be more tax-efficient to wait until you reach that age to withdraw, as the tax rate drops significantly.
- Insurance paid through your super - To maintain any insurance cover through your super, you need to have enough money left in your super account to pay for future premiums. In some circumstances insurance cover can cease if no contributions are made to your super account.
- Government benefits - The impact taking a super payment may have on any government benefits you’re receiving
- Severe Financial Hardship: If you are facing significant financial difficulties, you may be eligible to access a portion of your super. This typically requires proof that you have been receiving government support payments for a certain period.
- Compassionate Grounds: The Australian Taxation Office (ATO) allows early access to super on compassionate grounds. This includes medical treatment costs, palliative care, modifications required for disability, or funeral expenses for a dependent.
- Terminal Medical Condition: If you are diagnosed with a terminal medical condition, with less than 24 months to live, you can access your super tax-free.
- Temporary Residents Leaving Australia: Temporary residents who are leaving Australia permanently can access their superannuation through the Departing Australia Superannuation Payment (DASP).
- First Home Super Saver (FHSS) Scheme: This scheme allows you to save money for your first home inside your superannuation fund, offering tax benefits and potentially faster savings growth.
- Lump Sum Withdrawal: If allowed by your super fund, you can withdraw your super in one or more lump sum payments. However, once withdrawn, it is no longer considered super and may have different tax implications.
- Super Income Stream: This involves regular payments from your super fund, which may include account-based super income streams, capped defined benefit income streams, or innovative retirement income streams. Such income streams are favoured for their ability to manage income and spending.
- Account-Based Income Stream: This allows for regular income upon retirement, with the super fund continuing to invest the money and add returns to your account. It is crucial to note that once you start an income stream, you cannot add more money to it.
- Transition to Retirement Strategy: This reduces personal income tax without reducing after-tax income, combining salary sacrifice with drawing tax-free pension income from super.
- Account-Based Pensions: Upon eligibility, this strategy provides tax-free retirement income and ensures tax-free investment earnings within the pension account.
- Recontribution Strategy: Designed to reduce tax on super death benefits and protect against potential superannuation rule changes, this strategy focuses on converting taxable components of super into tax-free components.
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The information on this website is General Information only and therefore does NOT take into consideration your personal financial situation, objectives and needs. Prior to acting on any information on this website you should consider what is appropriate for your own personal financial situation, objectives and needs. Aus Super Solutions is not associated or affiliated with any super funds, we aren’t a financial advisory firm, we do not sell financial products nor do we give financial advice. Our role is to connect clients with fully licensed financial advisors that operate compliantly under an Australian Financial Services Licence. Aus Super Solutions does not take in any way responsibility for any advice or recommendations provided by the financial advisors. Prior to acting on any advice provided by the financial advisor you should and can ask as many questions as you deem necessary to ensure you have received the right advice for your personal financial situation. All fees and costs must be clearly explained and after speaking with a referred advisor you are under no obligation to commit to any recommendations made nor cost payable to Aus Super Solutions should you decide against the advice provided. Before making any decisions regarding your super you should obtain the super fund’s Product Disclosure Statement (PDS) and consider its contents. However our goal and mission is to only recommend and connect clients with fully licensed financial advisors and firms with established, positive track records in enhancing and servicing their clients financial situation, objectives and needs.
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