Masterclass SMSF – Transition to Retirement – What are the steps and advantages when you have self-managed super?

Masterclass SMSF – Transition to Retirement - What are the steps and advantages when you have self-managed super?

SMSF – Transition to Retirement – What are the steps and advantages when you have self-managed super?

Transition to Retirement is a strategy for people to consider when they are 55 and over and meet a condition of release and here we look at the steps and advantages when you have a self-managed super fund (SMSF).

For the details about Transition to Retirement (TTR or TRIS – Transition to Retirement Income Stream) see HERE.

STEPS to set up Transition to Retirement (TTR/TRIS)

When used as a tax strategy, if your income tax rate is more than 15% then TTR could provide benefits while still building your super, and maintain your current income, but reduce the tax you pay.

  1. Check the SMSF Trust Deed allows a TTR strategy (to avoid contravention).
  2. Calculate the results on several amounts to salary sacrifice and the tax due on the lower salary – this is usually the next tax bracket below your current salary, ie sacrifice enough to bring your gross salary into the next lower tax bracket.
  3. Prepare member letter to apply to the Trustees to start a pension/income stream account with some of your super monies, leaving some in accumulation account, or start another accumulation account for employer contributions to your fund. Record the Trustee Resolution of Minute of the Meeting that tabled the TRIS application.
  4. Arrange the salary sacrifice with your employer and draw a regular pension payment from the super. The salalry sacrificed amount will be PAYG taxed at a reduced rate (concessional), which means less tax when going into the fund instead of your marginal rate, and PAYG will need to be paid by the super fund when paying you.
  5. Check the calculations to determine what amounts work best for your case. Always seek professional assistance to ensure laws are not breached and that there is really a tax advantage.

Advantages

  1. Tax on your pension/income stream and salary should overall be less than your current tax (PAYG).
  2. Overall take-home pay can be maintained, while saving tax.
  3. No tax on investment earnings in the pension account. Only tax on the Income Stream you take, when in your hands.
  4. You can potentially be increasing your super faster than the employer %.
  5. Increased super can sometimes mean you could reduce your work hours, and receive a similar income.

If you would like a no-obligation discussion of possible strategies, give Paul a call 0407 361 596

Got questions? If you want experts who have years of helping others, without the hype – then call for a FREE strategy session today and also get your FREE Expert Guide – Self-Managed Super and Youtop right hand side above.

If you have any questions, why not give us a call – it’s FREE also! No obligation.

0407 361 596, Paul.

And book for our next  FREE Seminar – Self Managed Super Fund Roadmap – all you need to know plus bonuses see HERE and our SMSF and Property Boost to Super (combined) Free Seminar HERE

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About SuperBenefitnews

Self-Managed Superannuation Service Providers in Australia. WE do not provide Financial Advice or any other service that requires a legally authorized provider. However, where such advice or service is required we have our ‘Connect Assist’, a SuperBenefit resource we use to connect clients to a Licensed Advisor or other legally authorised service provider. SuperBenefit provides a wholistic SMSF assistance, education and administration service continuum - 1. “assistance” is help of whatsoever nature where our overall SMSF experience and knowledge enables us to provide assistance/help without any legal (or “license”) limitations. 2. “education” involves providing knowledge through teaching, coaching and mentoring about all matters SMSF, including (but not limited to) investment issues such as equities and property, 3. “administration” encompasses all admin aspects of legally required SMSF trustee and member record keeping including (but not limited to) audit and ATO matters. In keeping with our key point that SuperBenefit does not provide Financial Advice, where issues arise from 1, 2, and/or 3 above Indicate a need for a legally authorized provider (such as a Financial Adviser) and the client does not have their own service provider, the client can utilize SuperBenefit’s ‘Connect Assist’ … SuperBenefit, in itself, does not provide Financial Advice, but it does provide the wherewithal for great SMSF service. Call us 0407 361 596, no obligation FREE Connection call to see how we can help you!
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