Hey everyone, thanks for watching! I hope this video helped you better understand the types of taxes in retirement. Don't forget to grab your FREE 6-Step Superannuation Check at www.torowealth.com.au/6-step-super-check. It’s packed with actionable tips to optimise your superannuation.
Thank you. No better explanation of super anywhere. Does a tax free account based pension need to be considered for the tax payable on other non-super income?
Hi Chris Some great information. Thanks for sharing I always thought the Age Pension was received tax free; can you please re-confirm. What happens if you have no other income ? If it is taxed, I assume the 1st $18k is tax free, so could you make a (up to)$12k concessional contribution to super to eliminate tax ? If the pension is treated as income is the Medicare levy payable ? Any info appreciated Cheers
Really well laid out content. Thankyou. I did think the tax saving on your first $100k example of contributing $18.5k myself and the difference in super tax versus personal tax was overstated though?…
Up to TBC of course ;) Then remainder is stuck in accumulation phase where it still gets taxed at 15% (which isn't much better than the 16% rate on income between $18,200 and $45,000). And the 'income stream' could be SABP for a SMSF, or an annuity product (which might be of benefit if eligible for part or full SP). Probably is that simple for 95% of people, but financial advisors generally work for the other 5% who have more complex situations (or whatever part of the 95% who have simple situations but can't be bothered to learn enough to DIY their financial and tax planning).
Yes/No/Maybe... Sell the property, invest the proceeds into super, and purchase a pension/lifetime annuity? No tax on pension income, and a portion of the purchase price is not counted towards the assets test (for potential AP eligibility)? Depends on your super balance, age, work status, CGT that would be realized selling the rental property etc. etc. So, the usual 'it depends -- get personal advice from a financial adviser or tax accountant' mantra. General advice/info is, well, general... ;) Alternatively, use the rental income to purchase shares (or another property) and use leverage so get negative gearing so end up with reduced taxable income and increased long term capital gains. Gift it to someone on a low tax bracket (eg. a non-working married daughter) who won't pay much income tax on the rental income. After 5 years the 'deprived asset' also won't count towards the AP asset test any longer -- so you could get some AP and the daughter get up to 18,200pa rent income tax free... Transfer the property into a family trust and distribute income in the most tax effective way. Donate the property to charity. Charge less rent (so have less net rental income) So many ways to "reduce tax on rental income in retirement" ;)
@@fredfred4086 Well technically no -- while the money obtained as a loan is tax free, the interest on the loan is only tax deductible if the loan was used to buy an investment that produces investment (taxable) income. You can't just take out a separate loan secured against an existing property and spend that loan proceeds, then claim the loan interest as a tax deduction against the rental property income (rent). Claiming the interest on a personal use loan as a tax deduction would get caught as tax avoidance if you ever got a tax audit and they asked to show what the purpose of the loan was, to determine if the interest on that loan was a legitimate tax deduction or not. You might as well say to ask the tenants to pay some of the rent as cash in hand and not declare it -- reducing tax via tax avoidance is easy, but illegal. Tax minimisation is a bit more complex.
@@SuperGuyAu If you had an investment that large your pension would probably be zero due to the assets test. And you'd have had poor financial advice along the way to allow that situation to occur. Or else suck up your good fortune and stop claiming poor person's benefits.
You can contribute up to 30k (including employee contribution) Example - you earn 100k/yr plus super. your employer contributes 12k, and you can contribute 18k pre tax of your own money.
Current returns around 8% or more on superfunds. That’s $36k per annum. When the super balance gets below $399,000 for a married couple you can then get state pension of around $45k. With the $399,000 in super you need to draw 5% per annum which is $20k. So at that point you would be on $65,000 per annum which is not too bad I reckon
This is a standard fee for personal financial advice in Australia. I would be very cautious of any financial advisers that charge significantly less than this, as their advice is likely to be conflicted and they are probably getting remunerated through the products they recommend. Additionally, unlike the large majority of the industry, we never charge any ongoing fees. We charge a one-time fee for advice only. I would consider our service offering to be quite reasonable, but it's not for everyone.
Hey everyone, thanks for watching! I hope this video helped you better understand the types of taxes in retirement. Don't forget to grab your FREE 6-Step Superannuation Check at www.torowealth.com.au/6-step-super-check. It’s packed with actionable tips to optimise your superannuation.
Best Australian superannuation information on the web, bar none!
Very kind words, thank you! I just hope we can continue living up to this standard haha!
Thank you. No better explanation of super anywhere. Does a tax free account based pension need to be considered for the tax payable on other non-super income?
Thank you for the kind comments. No, it does not need to be recorded at all and will not affect the taxation of any other sources of taxable income.
Hi Chris
Some great information. Thanks for sharing
I always thought the Age Pension was received tax free; can you please re-confirm. What happens if you have no other income ? If it is taxed, I assume the 1st $18k is tax free, so could you make a (up to)$12k concessional contribution to super to eliminate tax ? If the pension is treated as income is the Medicare levy payable ?
Any info appreciated
Cheers
If you have no other income besides your pension, it is tax free.
Really well laid out content. Thankyou. I did think the tax saving on your first $100k example of contributing $18.5k myself and the difference in super tax versus personal tax was overstated though?…
Tax tax tax tax tax. Great information but rather depressing
I agree. The government is essentially a looting operation
Thank you
You're welcome!
Is a TTR assessed on personal income? or household income?
no, not even reportable when doing tax return
@@Woodland26 Ok, I don't understand then. If they have to deal with Centrelink, what are they trying to find out?
TTR pension income is not assessed for tax purposes, but the balance is 'deemed' to earn an income for Centrelink purposes.
I'm doing my own SMSF, can I retire and take out my Super early if I have made millions and won't apply for pension payments
preservation age is 60 and fulfil one of the condition of release.
Christ, I knew I should have completed that degree in rocket science.
haha
It’s quite simple just put it in a income stream and then all the other investments. Just keep it under 18,000 a year. 🤔
Up to TBC of course ;) Then remainder is stuck in accumulation phase where it still gets taxed at 15% (which isn't much better than the 16% rate on income between $18,200 and $45,000). And the 'income stream' could be SABP for a SMSF, or an annuity product (which might be of benefit if eligible for part or full SP). Probably is that simple for 95% of people, but financial advisors generally work for the other 5% who have more complex situations (or whatever part of the 95% who have simple situations but can't be bothered to learn enough to DIY their financial and tax planning).
@ if you put it in a pension fund, there is no tax
@@wealthelife all those acronyms. I’ve no idea what you have said.
$22,575 with low income offset ruclips.net/video/27yZgk3ARBU/видео.htmlsi=PVJaF9BSL9qW1wqg
Is there any way to reduce tax on rental income in retirement.
Yes/No/Maybe... Sell the property, invest the proceeds into super, and purchase a pension/lifetime annuity? No tax on pension income, and a portion of the purchase price is not counted towards the assets test (for potential AP eligibility)? Depends on your super balance, age, work status, CGT that would be realized selling the rental property etc. etc. So, the usual 'it depends -- get personal advice from a financial adviser or tax accountant' mantra. General advice/info is, well, general... ;)
Alternatively, use the rental income to purchase shares (or another property) and use leverage so get negative gearing so end up with reduced taxable income and increased long term capital gains.
Gift it to someone on a low tax bracket (eg. a non-working married daughter) who won't pay much income tax on the rental income. After 5 years the 'deprived asset' also won't count towards the AP asset test any longer -- so you could get some AP and the daughter get up to 18,200pa rent income tax free...
Transfer the property into a family trust and distribute income in the most tax effective way.
Donate the property to charity.
Charge less rent (so have less net rental income)
So many ways to "reduce tax on rental income in retirement" ;)
Cash or deductions. Depending on your income, you can also keep an accumulation super account open and deposit into it at 15%
Take out a small loan against the property. The loan is tax free, to be used how you want, and the rent repays the loan and is tax deductible.
@@fredfred4086 Well technically no -- while the money obtained as a loan is tax free, the interest on the loan is only tax deductible if the loan was used to buy an investment that produces investment (taxable) income. You can't just take out a separate loan secured against an existing property and spend that loan proceeds, then claim the loan interest as a tax deduction against the rental property income (rent). Claiming the interest on a personal use loan as a tax deduction would get caught as tax avoidance if you ever got a tax audit and they asked to show what the purpose of the loan was, to determine if the interest on that loan was a legitimate tax deduction or not. You might as well say to ask the tenants to pay some of the rent as cash in hand and not declare it -- reducing tax via tax avoidance is easy, but illegal. Tax minimisation is a bit more complex.
Assuming you can make a concessional contribution, contribute the rent to superannuation, claim a deduction and it will only be taxed at 15%.
4:58 - If your marginal tax rate is 47%, there is no way your centrelink age pension will be anything but $0.00
What if you sold an investment with a large capital gain in that year?
@@SuperGuyAu If you had an investment that large your pension would probably be zero due to the assets test. And you'd have had poor financial advice along the way to allow that situation to occur. Or else suck up your good fortune and stop claiming poor person's benefits.
I thought you could contribute 27,000 to super and pay only 15pc tax on the whole amount. Anyone clear on this ?
30 K as of this financial year
Correct 👍@@inovatas
@ thank you muchly.
$25 - $30k over the last five years. It has incrementally increased.
You can contribute up to 30k (including employee contribution)
Example - you earn 100k/yr plus super. your employer contributes 12k, and you can contribute 18k pre tax of your own money.
If I have 450,000 in super how does it last 30 years if I'm getting 50k per year.
Current returns around 8% or more on superfunds. That’s $36k per annum. When the super balance gets below $399,000 for a married couple you can then get state pension of around $45k. With the $399,000 in super you need to draw 5% per annum which is $20k. So at that point you would be on $65,000 per annum which is not too bad I reckon
So say I'm single with 400k and want to retire at 65 would it still last around 20-30 years.
Shame it costs over $5000 + to see these guys
This is a standard fee for personal financial advice in Australia. I would be very cautious of any financial advisers that charge significantly less than this, as their advice is likely to be conflicted and they are probably getting remunerated through the products they recommend. Additionally, unlike the large majority of the industry, we never charge any ongoing fees. We charge a one-time fee for advice only. I would consider our service offering to be quite reasonable, but it's not for everyone.
When you retire 67 years, you shouldn't be taxed on any income end of story the government always understands your pocket
Stop dreaming, end of story
@peteb4148 ok sheep
Need to spellcheck your slides
Thanks!