Baby Boomers. Here's some happy news
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Get set to enjoy life even more
You may have heard about the reforms and changes to superannuation outlined in the 2006
Federal Budget. In fact, these are some of the biggest reforms to superannuation in decades in
Australia. These changes give you an extra incentive to work and save for your retirement, and best
of all, should improve your income flow after you stop working.
Tax free super benefits, coming soon
If you are close to stopping work, the biggest news is the abolition of taxes on super
benefits taken after age 60. From 1 July 2007 all super benefits taken after age 60 are tax
free:
With these changes, you have a stronger incentive to delay withdrawing
money from super until you reach age 60 or later. If you are less than 60, you will pay a variety
of taxes on super withdrawals. But with some planning and waiting until you are 60, you should be
able to withdraw money from your super fund as a lump sum or a pension tax free.
Take advantage of more flexible Age Pension rules
In the past, if you didn't qualify for the age pension, look again. You may be eligible
for a part pension with this change: From 20 September 2007, retirees lose only $1.50 of
pension (instead of $3) for every $1000 over the assets test threshold.
What does it mean to you? A home-owner couple can own around $783,000 in assessable assets
and get a part pension, versus $503,500 under the present system. The figures for single
home-owners are $493,000 versus $325,500 (as at 15 June 2006). |
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