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10 ways the government can assist with retirement
Invest in super
The Government provides a range of tax concessions through superannuation. This includes concessional tax rates on contributions and investment earnings, as well as tax-free lump sums and income stream payments are available to individuals aged 60 or over.
Spouse contributions
By contributing to superannuation for your low-income earning or non-working spouse, you may be entitled to a tax offset on your personal tax.
Borrow to invest
By borrowing to invest you are able to either positively or negatively gear your investments.
Positive gearing means the income from your investment is greater than the interest you pay on your loan. Negative gearing means the interest you pay on your loan is greater than the income you receive from your investment. This loss means you may be able to claim a tax deduction.
Government superannuation co-contribution
If you are employed or self-employed, under age 71, and earning less than $58,980 per annum, you may be eligible for a Government co-contribution to your super, up to a maximum of $1,500 per annum. You need to meet a number of criteria to qualify, including making a personal contribution into superannuation.
Pay off your mortgage
Your principal residence is not generally subject to capital gains tax (CGT).
Private health insurance
By purchasing a private health insurance policy you can receive a tax offset of up to 40 per cent on the cost of premiums.
Super as an income stream
By taking your super as an income stream you avoid paying lump sum tax. Individuals aged 60 or over can receive tax-free income stream payments, subject to preservation rules.
The Age Pension
Are you eligible? There are a number of criteria that must be met to be eligible for the Age Pension, which include:
- the income and assets tests;
- age requirements, and
- residence requirements.
The Pension Bonus Scheme
This is a scheme available to Australians who defer claiming the Age Pension for up to five years beyond their pension eligibility age, while remaining in the workforce.
Income tax offsets
In retirement, you may be eligible for tax offsets that reduce your tax liability.
The above information should be explored in greater detail. Speak to your financial adviser for guidance and visit the following websites for more information:
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Further Information |
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