Planning for retirement is an important task that requires careful consideration and preparation.
A part of that planning, and eventual implementation, should be a focus on making things tax effective.
When you sell your business, not only do you want to minimise taxes during sale, you want to minimse taxes over the long-term.
For instance, if the sale results in a large cash lump sum, you want the income you generate from that over the forthcoming years to be taxed as least as possible.
A common strategy to mitigate taxes in retirement is to build up wealth in your superannuation account. This is because the tax rate on superannuation earnings may be nil or at a rate lower than your ordinary tax rate.
In the years leading up to retirement, your plan may include maximising both your concessional and non-concessional contribution limits. Around the time of sale of your business, if eligible, your plan may also include maximising special concessional limits. Later you might also utilise the downsizer contribution limit.
Ultimately, tax professionals such as ourselves can work with you in the lead up to, and during retirement, to effectively save you tax.
At Munro’s, we don’t provide investment advice, but rather work alongside you and your financial advisor to help with an holistic retirement plan that both achieves your income and wealth objectives, together with your tax objectives.
Where clients don’t yet have a financial advisor, we are able to introduce them to financial advisors we trust to do the right thing.
We also proudly assisted our clients with tax effective estate planning, which can include the outputs of:
- A tax effective Will;
- An Enduring Power of Attorney; and
- An Enduring Power of Guardianship.
During such conversations we also assist clients with considering whether any of their assets should be transferred to the next generation while they are still alive.
There are a few reasons why you might want to consider doing this, including:
- Mitigating the consequences of a potentially disputed Estate;
- Potentially increase the tax cost base of your capital assets; and
- Wanting to access Centrelink benefits.
While we leave the legal and financial advice to the experts, we will always be there as a sounding board – always truly looking out for your best interests as your Trusted Advisor.
If you would like an advisor that truly cares, we would love to hear from you and begin an incredible journey together.