Page 10 - FWP Wealth Adviser Newsletter - February 2025

ISSUE 105
FEBRUARY 2025

In these uncertain times, seeking professional advice can be invaluable. A
qualified financial adviser can help tailor these strategies to your unique

situation, ensuring that your retirement plan is both tax-efficient and
robust enough to navigate the complexities of today’s financial markets.

Strategy 1: Optimising the Transfer Balance Cap the ever-changing economic landscape. “Financial advisers
Margaret transfers $1.9 million (the current cap) to a pen- play a crucial role in balancing complex pension rules with
sion account, leaving $200,000 in her accumulation account. market risks,” emphasises retirement specialist Emma
This maximises her tax-free pension income while maintain- White.
ing flexibility for future contributions or withdrawals. As we’ve seen, building a tax-efficient retirement strat-
egy involves more than simply maximising pension-phase
Strategy 2: Tax-Efficient Withdrawals benefits. It requires a holistic approach that considers tax
Margaret draws the minimum 4% ($76,000) from her implications, market risks, and personal circumstances. By
pension account tax-free. To supplement this, she with- combining tax-optimisation techniques with prudent risk
draws an additional $24,000 from her accumulation ac- management strategies, retirees can build more resilient
count, incurring minimal tax due to various offsets and the portfolios capable of weathering economic uncertainties
low-income threshold. while maximising their retirement income.
In these uncertain times, seeking professional advice can
Strategy 3: Diversification Against Fiscal Risks be invaluable. A qualified financial adviser can help tailor
Recognising the potential impact of rising bond yields, these strategies to your unique situation, ensuring that your
Margaret works with her financial adviser to restructure retirement plan is both tax-efficient and robust enough to
her portfolio. She increases her allocation to short-duration navigate the complexities of today’s financial markets.
bonds and dividend-paying stocks from diverse sectors,
reducing her exposure to high-growth tech stocks that may References:
be more vulnerable to interest rate shifts. 1. Firstlinks. (2025). How to shift into pension mode. https://www.
firstlinks.com.au/how-to-shift-into-pension-mode
Strategy 4: Recontribution for Estate Planning 2. Firstlinks. (2025). The two key risks facing investors. https://www.
Margaret implements a recontribution strategy, firstlinks.com.au/the-two-key-risks-facing-investors
withdrawing $330,000 (the maximum non-concessional 3. Firstlinks. (2025). Retirement is a risky business for most people.
contribution over three years using the bring-forward rule) https://www.firstlinks.com.au/article/retirement-is-a-risky-business-
from her accumulation account and recontributing it as a for-most-people
non-concessional contribution. This increases the tax-free 4. Australian Taxation Office. (2024). Transfer balance cap. https://www.
component of her superannuation, potentially reducing tax ato.gov.au/individuals/super/in-detail/withdrawing-and-using-your-
for her beneficiaries. super/transfer-balance-cap/
By implementing these strategies, “A structured transi- 5. Australian Securities and Investments Commission. (2024).
tion into pension mode can reduce tax liabilities by up to Moneysmart: Retirement income planning. https://moneysmart.gov.
15% while also building resilience against market uncertain- au/retirement-income-planning
ties,” notes Margaret’s financial adviser.

Conclusion: The Role of Advice in Uncertain
Times
Navigating the transition from superannuation to pen-
sion phase is a complex process, made more challenging by

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