- Below is a comparison of your current and proposed positions which illustrates the changes to your superannuation structure and the cashflow effect that this will have.
Belfast*
|
Current
|
Proposed
|
Pension Income
|
$ 19,957.00
|
|
Salary Sacrifice Contributions
|
$ -
|
$ 28,255.00
|
Income Tax (Personal)
|
$ 8,561.00
|
$ 263.00
|
Contributions Tax (Super)
|
$ 518.00
|
$ 4,756.00
|
Total Tax
|
$ 9,079.00
|
$ 5,019.00
|
Take Home Pay
|
$ 42,868.00
|
$ 42,868.00
|
- Establishing a Transition to Retirement Income Stream will provide you with additional income via a pension to help you make additional salary sacrifice contributions to superannuation which will in turn reduce your personal taxation position.
- Implementing this strategy will reduce your tax payable position by $4,060.
- Your take home income level after our recommendations will remain the same as your current position.
- Your superannuation will be moved into a tax-free environment. Based on current legislation, earnings generated by your underlying investments whilst in the accumulation phase of superannuation are taxed at 15% whereas in the pension environment, earnings are 100% tax-free.
- By moving funds from superannuation (where earnings are taxed at 15%) into a pension, this effectively prevents tax from eroding your income returns.
- Rebooting your pension annually will ensure that the bulk of your superannuation monies remain consolidated in a tax advantaged environment and invested as per your risk profile.
- You are currently able to contribute up to $35,000 per annum to superannuation via Concessional contributions.
- Salary Sacrifice contributions are tax deductible.
- All pension payments will be tax-free.
- You are able to alter your income level (but must remain above the minimum) at any time.
·
Investment earnings on your capital within the Account Based
Pension environment are completely tax-free.
·
There is no capital gains tax implications for any capital gain that
you realise while invested within the Account Based Pension environment.
·
The capital invested in the account based pension can be accessed
at any time by making lump sum withdrawals tax free.
·
Account Based Pensions are “Centrelink friendly” investments, as a
significant portion of the income you receive will be exempt from Centrelink’s
Income Test.
·
Your capital is not lost on death. The balance can be paid to your dependants,
or paid in accordance with your Will or estate.
·
If you have nominated a reversionary pensioner on the account
(e.g. a spouse), in the event that you pass away, the reversionary pensioner
may choose to continue to receive regular pension payments, or commute the
remaining capital to a lump sum.
DISADVANTAGES
Yes there are a couple
which are fully explained but we won’t
include them here as our advice document for Belfast* is 21 pages.
We also provided this disclaimer
In addition to the above, we need to inform
you that the provider of the advice can outline general taxation implications
of any strategic information. However,
- the provider of the advice is not a registered tax (financial) adviser under the Tax Agent Services Act 2009; and
- if the receiver of the advice intends to rely on the advice to satisfy liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law, the receiver should request advice from a registered tax agent or a registered tax (financial) adviser.
We
could have added this but Belfast* who we have advised for 13 years knows this.
‘Good
Morning John,
I refer to
our conversation yesterday.
It gives me great pleasure to advise that
your Application for the Certified
Financial Strategist (CFS) certification has been successful……’
07 3848 1088 or email us or visit our websites.
We believe that we can generate significant financial certainty for you throughout our relationship & importantly add substantial value to ensuring you achieve all that is important & valuable to you as you have articulated to us.’
If we were to sit down in three years time & looked back what do we need to do today so that you are financially & personally better off & happier.
John McAuliffe
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