Planning To Retire? Consider this!

You’ve worked hard for a long time, and are planning to retire soon. Did you know that there are various things to consider? What are the things you should know before retiring?

Check if you can access your super

You can access your super at any time after you reach preservation age. This is the age at which you have to wait before you can withdraw or roll over your super.

Please note that the basis of your preservation age lies to your date of birth.. See below preservation age per the ATO

If your date of birth is:

Before 1 July 1960
then your preservation age is 55

1 July 1960 – 30 June 1961
then your preservation age is 56

1 July 1961 – 30 June 1962
then your preservation age is 57

1 July 1962 – 30 June 1963
then your preservation age is 58

1 July 1963 – 30 June 1964
then your preservation age is 59

From 1 July 1964
then your preservation age is 60

You can also access your super when you reach the age of 65 or if you are eligible under the transition to retirement while working.

Check if you can reduce your hours and still earn the same

If you’re planning to retire, you may be wondering how you can reduce your working hours without reducing your income.

Per the ATO, the transition to retirement rules allow you to reduce your working hours without reducing your income. To do this, you can choose to start a transition to retirement income stream (TRIS). 

You can only access your super benefits as a ‘non-commutable’ income stream. This generally means that you can’t take your benefits as a lump sum cash payment while you are still working.

For more details about this, please visit the ATO website using this link: https://bit.ly/3N9LmTq

Check approved early retirement scheme

A tax-free early retirement scheme is one in which an employer encourages certain groups or classes of employees to retire early by making payments that are tax-free to a limit. The employer must apply for and receive approval from the Australian Taxation Office before payments under the scheme can start.

For more details about this, please visit the ATO website using this link: https://bit.ly/3lTLs5w

Takeaway

Whether you’re planning to retire or moving on from working life, it’s important that you know the basics of superannuation and how it affects your tax and exit strategy. The points outlined above should hopefully point you in the right direction, but you should always take professional advice for a final ruling.

If you need a professional advise, please contact us at admin@profit1st.com.au, or visit our contact us page.

References: https://www.ato.gov.au/Individuals/Jobs-and-employment-types/working-as-an-employee/leaving-the-workforce/