When planning your retirement, it is important to take into account the taxation implications of certain financial decisions that you make.
Under the superannuation tax rules:
If you are over age 60:
- Any lump sum payment received from a taxed fund is tax-free.
- Any superannuation pension payment received from a taxed fund is tax-free.
If you are between age 55 and 60:
- If you take a lump sum, the first part of the taxed element, $165,000 (2011-2012 figure) of your lump sum is free of income tax. The remainder of the taxed part is subject to tax of 15 per cent (plus 1.5 per cent Medicare levy).
- If you take a superannuation pension any taxable component is taxed at your marginal tax rate. The taxable component also receives a 15 per cent tax offset. For some retirees this offset can result in no tax being paid on superannuation pension payments.
More information is available through the Australian Tax Office (ATO). Or speak to a tax accountant.
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