A recent article in the Sydney Morning Herald described how hundreds of thousands of older Australians could be paying tax on their super when they don’t need to. Unfortunately, they are unaware of a simple – and perfectly legal – change they can make to avoid paying this tax.
When you turn 65, you’re eligible to move your super from an accumulation account that’s taxed to a pension account that usually isn’t. Many people (potentially hundreds of thousands of people) don’t make this change and their super remains in an account where it’s hit hard by taxes – the current tax rate on accumulation accounts is 15%. It’s likely people don’t make this change simply because they aren’t aware they’re able to do so.
It's hard to wrap your head around the complicated world of tax and to know what your obligations and opportunities are. That’s why engaging a financial adviser you can trust can be so important. In some cases, it actually won’t be in your best interest to move your super into a pension account when you turn 65 – again, it’s a complex issue – and it’s best to seek professional advice.
At 5 Financial, we make sure our clients are protected from unnecessary tax burdens. We actively educate and inform our clients about legal ways to minimise taxation on their super.
In developing our financial plans, we provide tailored strategies that help clients maximise their resources and take advantage of any opportunities – like moving to a pension account when you turn 65 (if we think it’s in your best interest).
When you engage our services, you’ll have access to professional advice that keeps your best interest at heart. Keeping your super in an industry fund without an adviser to look out for you is when unnecessary taxation can occur.
We provide comprehensive support for retirement planning and work with you to help you understand complex regulations, tax implications and strategic fund management, so you can be confident your financial future is in safe hands.
References:
https://moneysmart.gov.au/how-super-works/tax-and-super
Please note, the above information does not constitute financial advice and does not take into account your current circumstances or goals. Please speak with a financial adviser before acting on any information found here or throughout the 5 Financial website.