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Savings strategy for over 55s

If you are over the age of 55 and are still earning income through employment, then you may be able to make significant tax savings using the transition to retirement scheme.

When you use the transition to retirement strategy, you have two superannuation accounts. One account receives your employer’s contributions and any additional contributions that you make (concessional or non-concessional). The other account is your retirement income account, where you place a portion of your savings and pay yourself a pension.

The advantages to this strategy are that you can enjoy the tax benefits of making contributions to your superannuation while drawing on a tax-free pension from your retirement income account. You can use the transition to retirement strategy to grow your nest egg or to reduce the number of hours that you work without impacting your income.

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News

What to do with your Lost Super

March 19, 2021

After COVID 19’s impact on the world, an influx of employees who had lost their jobs fell into the job market. Many of these came from companies that couldn’t afford to continue their employment. As a result, many individuals had to seek alternative employment, or draw from their super. Some individuals took on multiple jobs to pay bills, and others drew from the super that they had accumulated in the government’s early release scheme specifically for coronavirus related income loss.

Super is held by superannuation funds, and accumulates as a result of how much super an employer pays to the employees’ funds. Many Australians may find that they actually possess multiple super accounts as a result of having “lost” their super accounts during changeovers. It can also happen as a result of changing names, moving addresses, living overseas or changing jobs.

Australians can use the ATO’s online tools to:

As superannuation funds often have fees associated with their upkeep, as well as insurances that may be tied into it (such as life, total and permanent disability and income protection), it’s important to consult with providers before accounts are consolidated.

https://www.ato.gov.au/Individuals/Super/Growing-your-super/Keeping-track-of-your-super/#Lostsuper