Page 8 - FWP Wealth Adviser Newsletter - February 2025
P. 8
ISSUE 105
FEBRUARY 2025
SHVETS production/Pexels
From Super to Pension
Building a Tax-Efficient Retirement
Strategy in Uncertain Times
BY WEALTH ADVISER 60, investment earnings within your pension account are
entirely tax-free. This contrasts sharply with the accumula-
he transition from superannuation accumulation to re- tion phase, where earnings are taxed at 15%. However, these
tirement is a critical financial planning phase, fraught benefits come with important caveats and restrictions.
Twith complexities and opportunities. As retirees navi-
gate this shift, they face not only the intricacies of Australia’s Transfer Balance Cap and Minimum
superannuation system but also a global economic landscape Withdrawals
where fiscal policy shifts and market concentration amplify The Australian Taxation Office (ATO) imposes a transfer
risks. This article explores strategies for building a tax-effi- balance cap, currently set at $1.9 million, limiting the
cient retirement plan while addressing the uncertainties of amount that can be moved into the tax-free pension envi-
today’s financial markets. ronment. This cap is designed to ensure the sustainability of
the superannuation system while still providing substantial
Understanding the Pension Phase: Tax Benefits tax benefits for most retirees.
and Rules Additionally, the ATO mandates minimum annual
For many Australians, the allure of the pension phase withdrawal amounts from pension accounts, which increase
lies in its significant tax advantages. Once you’re over with age:
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