Retirees who find themselves paying more tax on bank deposits because of rising interest rates can move the money into superannuation.
Q: I am 69 and retired. I have $1 million in a self-managed superannuation fund paying me an account-based pension, and I also have $500,000 in savings outside super in interest-paying accounts. After years of low interest rates, I will now have to start paying tax on the interest earnings. What I’d like to do instead is tip $330,000 into super as a non-concessional contribution and then start another account-based pension from this.
In an SMSF, she says, this transfer could happen immediately after you make the contribution – that is, a moment or so later on the day of the contribution – and it would be a simple matter of you asking you to commence a new pension immediately after the contribution is received, and the trustee agreeing to do so.
Your cap will be somewhere between $1.6 million and $1.9 million, with the precise amount depending on several factors, including when you started your existing account-based pension and its original value.If you did the above, says Mansell, you’d have two account-based pensions being paid to you from your SMSF. Each would have to pay you the minimum withdrawal rate for your age.
If you fail to meet the minimum pension payment requirements for your pension, the ATO will treat you as not having paid a super income stream from the start of that income year. This will see investment earnings on assets that support the pension taxed at 15 per cent rather than being exempt from tax.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Retirement-“Why retirees have to pay their fair share of tax”‘I worked hard and paid all my taxes’ does not pass the pub test when tax-free retirements now last so long.
Read more »
‘I lived my fairytale’: Eels enforcer announces immediate retirement after string of concussionsRugby League: Wigan are Super League champions for the first time since 2018 after a hard-fought 10-2 win over Catalans Dragons in the Grand Final.
Read more »
Stay on top of this, and you won’t run out of retirement savingsSelf-funded retirees who often assume if they start by living off their savings and superannuation, that’s how they’ll end it. But this is not the case.
Read more »
Eels blow as star forced into retirementEels forward Andrew Davey has announced he has retired from the NRL, effective immediately after advice from medical experts.
Read more »
Stay on top of this, and you won’t run out of retirement savingsSelf-funded retirees who often assume if they start by living off their savings and superannuation, that’s how they’ll end it. But this is not the case.
Read more »
Stay on top of this, and you won’t run out of retirement savingsSelf-funded retirees who often assume if they start by living off their savings and superannuation, that’s how they’ll end it. But this is not the case.
Read more »