Retirement Strategies

1. The re-contribution strategy
This involves cashing out some of your super, paying any lump sum tax, and re-contributing it into either your super account or your spouse’s super account. If you are over 55 and under 60, you can cash out up to $150,000 of your taxable component and pay no tax. This may sound a little strange, but it may save you significantly in tax. When you re-contribute the money back into your super account, it is classified as non-concessional (after-tax) contribution, which increases your tax free income in retirement.
This strategy may not be worthwhile if you intend to retire after age 60. However, it still may be useful as it may save your non-dependant beneficiaries (eg adult children who are not financially dependant on you) a significant amount of tax later on. Additionally, if you retire before age 60, this strategy may provide you with a tax effective income stream, so speak with your financial adviser to find out more.

2. Claiming personal deductions
You might use this strategy if you sell an asset which triggers a capital gain. If you are eligible to make a personal concessional contribution (eg you are self employed), you can offset any assessable capital gains up to your concessional cap.
If you are under age 50 on the last day of the financial year your concessional cap is $25,000 pa (indexed). If you are 50 or over you are entitled to a $50,000 pa cap until 30 June 2012.

3. Access your super while you’re still working
If you’re over 55 and under 60 you can now access your super in the form of a pre-retirement pension while you’re still working.

source: www.colonialfirststate.com.au