{"id":1723,"date":"2020-10-13T14:37:00","date_gmt":"2020-10-13T03:37:00","guid":{"rendered":"https:\/\/www.gpadviser.com.au\/gpl-theme-1-2015\/2020\/10\/13\/retirement-income-and-tax\/"},"modified":"2020-10-13T14:37:00","modified_gmt":"2020-10-13T03:37:00","slug":"retirement-income-and-tax","status":"publish","type":"post","link":"https:\/\/www.gpadviser.com.au\/gpl-theme-1-2015\/2020\/10\/13\/retirement-income-and-tax\/","title":{"rendered":"Retirement income and tax"},"content":{"rendered":"<p class=\"pagesummary\"><strong>How much tax you pay on retirement income depends on your age and the type of income stream.<\/strong><\/p>\n<p>For most people, an income stream from superannuation will be tax-free from age 60.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" alt=\"\" height=\"300\" src=\"http:\/\/internal.clientcommunity.com.au\/uploaded\/level\/2063\/3rdparty-10august-foodmatters-2.jpg\" width=\"570\" \/><\/p>\n<h2 id=\"jumpAnchor0\">How super income streams are taxed<\/h2>\n<h3>Types of super income streams<\/h3>\n<p>Income from super can be an:<\/p>\n<ul>\n<li>\n<p><a href=\"https:\/\/moneysmart.gov.au\/retirement-income\/account-based-pensions\" target=\"_blank\" rel=\"noopener noreferrer\">account-based pension<\/a>\u00a0\u2014 a series of regular payments from your super money<\/p>\n<\/li>\n<li>\n<p><a href=\"https:\/\/moneysmart.gov.au\/retirement-income\/annuities\" target=\"_blank\" rel=\"noopener noreferrer\">annuity<\/a>\u00a0\u2014 a fixed income for the rest of your life or a set period of time<\/p>\n<\/li>\n<\/ul>\n<h3>What is taxable and what is tax-free<\/h3>\n<p>Part of your super money is taxable, made up of:<\/p>\n<ul>\n<li>\n<p>employer contributions<\/p>\n<\/li>\n<li>\n<p>salary sacrificed\u00a0contributions<\/p>\n<\/li>\n<li>\n<p>personal contributions claimed as tax deductions<\/p>\n<\/li>\n<\/ul>\n<p>Part is tax-free, made up of:<\/p>\n<ul>\n<li>\n<p>after tax contributions<\/p>\n<\/li>\n<li>\n<p>government co-contributions<\/p>\n<\/li>\n<\/ul>\n<h3>If you&#8217;re age 60 or over<\/h3>\n<p>Your entire benefit from a taxed super fund (which most funds are) is tax-free.<\/p>\n<h3>If you&#8217;re age 55 to 59<\/h3>\n<p>Your income payment has two parts:<\/p>\n<ul>\n<li>\n<p>taxable \u2014 taxed at your\u00a0marginal tax rate, less a 15% tax offset<\/p>\n<\/li>\n<li>\n<p>tax-free \u2014 you don&#8217;t pay anything more<\/p>\n<\/li>\n<\/ul>\n<h3>If you&#8217;re age 55 or younger<\/h3>\n<p>You can usually only access your super if you experience permanent incapacity. If this happens, you&#8217;ll be taxed the same as people aged 55 to 59.<\/p>\n<p>If accessing super for a different reason, such as severe financial hardship, your income payment has two parts:<\/p>\n<ul>\n<li>\n<p>taxable \u2014 taxed at your\u00a0marginal tax rate<\/p>\n<\/li>\n<li>\n<p>tax-free \u2014 you don&#8217;t pay anything more<\/p>\n<\/li>\n<\/ul>\n<div class=\"calculatorLink clickable\">\n<p><a href=\"https:\/\/moneysmart.gov.au\/income-tax\/income-tax-calculator\" target=\"_blank\" rel=\"noopener noreferrer\">Use our income tax calculator<\/a><\/p>\n<p>Work out your marginal tax rate.<\/p>\n<\/p><\/div>\n<h2 id=\"jumpAnchor1\">Tax on other types of super funds<\/h2>\n<h3>Defined benefit super fund<\/h3>\n<p>If you&#8217;re with a\u00a0defined benefit super fund, you&#8217;ll get a statement from your fund before becoming eligible for your benefit (super money). This will tell you how much of your benefit is taxable and how much is tax-free.<\/p>\n<h3>Untaxed super fund<\/h3>\n<p>Some government super funds don&#8217;t pay regular tax on contributions. These are known as &#8216;untaxed funds&#8217;. If you&#8217;re a member of an untaxed fund, you pay tax when you access your money. Check with your fund to find out more.<\/p>\n<h3>Self-managed super fund (SMSF)<\/h3>\n<p>If you&#8217;re part of a\u00a0<a href=\"https:\/\/moneysmart.gov.au\/how-super-works\/self-managed-super-funds-smsf\" target=\"_blank\" rel=\"noopener noreferrer\">self-managed super fund (SMSF)<\/a>, how you access your money depends on the &#8216;trust deed&#8217; (rules).<\/p>\n<h2 id=\"jumpAnchor2\">Tax on transition to retirement income streams<\/h2>\n<p>With a\u00a0<a href=\"https:\/\/moneysmart.gov.au\/retirement-income\/transition-to-retirement\" target=\"_blank\" rel=\"noopener noreferrer\">transition to retirement<\/a>\u00a0(TTR) income stream, you can access your super while working. To get one of these pensions, you must have reached your\u00a0preservation age\u00a0 (between 55 and 60).<\/p>\n<div class=\"calculatorLink clickable\">\n<p><a href=\"https:\/\/moneysmart.gov.au\/retirement-income\/super-and-pension-age-calculator\" target=\"_blank\" rel=\"noopener noreferrer\">Use our super and pension age calculator<\/a><\/p>\n<p>Find out your preservation age.<\/p>\n<\/p><\/div>\n<p>You can take out up to 10% of the balance each financial year. You can&#8217;t withdraw it as a lump sum.<\/p>\n<p>You pay the same amount of tax as on other super income streams, according to your age. Investment returns on TTR pensions are taxed at up to 15%, the same as a\u00a0super accumulation fund<\/p>\n<h2 id=\"jumpAnchor3\">Tax on non-super income streams<\/h2>\n<p>With an\u00a0annuity bought with money from outside super, you get a fixed income for a set period of time. This pension income, less a deductible amount, is taxed at your\u00a0marginal tax rate<\/p>\n<p>The deductible amount is the part of your original money (capital) coming back to you with each pension payment.<\/p>\n<h2 id=\"jumpAnchor4\">Get help if you need it<\/h2>\n<p>Find out more about\u00a0<a class=\"external-link\" href=\"https:\/\/www.ato.gov.au\/Individuals\/Super\/In-detail\/Withdrawing-and-using-your-super\/Withdrawing-your-super-and-paying-tax\/\" target=\"_blank\" rel=\"noopener noreferrer\">withdrawing your super and paying tax<\/a>\u00a0on the Australian Taxation Office (ATO) website.<\/p>\n<p>Services Australia&#8217;s\u00a0<a class=\"external-link\" href=\"https:\/\/www.humanservices.gov.au\/individuals\/services\/financial-information-service\" target=\"_blank\" rel=\"noopener noreferrer\">Financial Information Service<\/a>\u00a0offers free seminars on topics such as retirement income and pension options.<\/p>\n<p>For help with tax matters, see a tax professional or contact us on |PHONE|.<\/p>\n<p><a href=\"https:\/\/moneysmart.gov.au\/retirement-income\/retirement-income-and-tax\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-size: 10px\">Source: Moneysmart<\/span><\/a><\/p>\n<p><span style=\"font-size: 10px\">Reproduced with the permission of ASIC\u2019s MoneySmart Team. This article was originally published at\u00a0<a class=\"waffle-rich-text-link\">https:\/\/moneysmart.gov.au\/retirement-income\/retirement-income-and-tax<\/a><\/span><\/p>\n<p>\u00a0<\/p>\n<p><span style=\"font-size: 10px\">Important note: This provides general information and hasn\u2019t taken your circumstances into account.\u00a0 It\u2019s important to consider your particular circumstances before deciding what\u2019s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete.\u00a0You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.\u00a0 Past performance is not a reliable guide to future returns.<\/span><\/p>\n<p><span style=\"font-size: 10px\">Important Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents\/information contained within the linked site(s) accessible from this page.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>How much tax you pay on retirement income depends on your age and the type of income stream. For most people, an income stream from superannuation will be tax-free from age 60. How super income streams are taxed Types of super income streams Income from super can be an: account-based pension\u00a0\u2014 a series of regular [&hellip;]<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[19],"tags":[],"class_list":{"0":"post-1723","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-general-articles","7":"entry"},"_links":{"self":[{"href":"https:\/\/www.gpadviser.com.au\/gpl-theme-1-2015\/wp-json\/wp\/v2\/posts\/1723","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.gpadviser.com.au\/gpl-theme-1-2015\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.gpadviser.com.au\/gpl-theme-1-2015\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.gpadviser.com.au\/gpl-theme-1-2015\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.gpadviser.com.au\/gpl-theme-1-2015\/wp-json\/wp\/v2\/comments?post=1723"}],"version-history":[{"count":0,"href":"https:\/\/www.gpadviser.com.au\/gpl-theme-1-2015\/wp-json\/wp\/v2\/posts\/1723\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.gpadviser.com.au\/gpl-theme-1-2015\/wp-json\/wp\/v2\/media?parent=1723"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.gpadviser.com.au\/gpl-theme-1-2015\/wp-json\/wp\/v2\/categories?post=1723"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.gpadviser.com.au\/gpl-theme-1-2015\/wp-json\/wp\/v2\/tags?post=1723"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}