Your Questions Answered: How is tax calculated in retirement?

Подписаться 28 тыс.

Просмотров 6 тыс.

50% 1

How is tax calculated in retirement?
This is the question we will try to answer today based on the inquiry received from Sven:
If I earn $50,000 per year from a super income stream and then I earn $18,000 from bank interest, is
that 18k tax free or is it added to the 50k and that sets your tax rate at 32%? Or I earn $18,000 in
fully franked shares on top of my 50k in super income what are the numbers there.
An important aspect of this income is $50,000 from super income stream. As long as this is your
retirement income and not for example a TTR Pension (Transition to Retirement Pension), there is
no tax payable on income received. What’s more this income is not even part of your taxable
income. It does not need to be included in your tax assessment.
Therefore, if we can disregard $50,000 income for tax purposes, in this instance, only $18,000 is your
taxable income.
Considering that this level of income is below our $18,200 tax free threshold, there is no tax payable.
Obviously if your income earned from investments is greater than the tax-free threshold, then your
tax bill will be calculated as per usual formula as per marginal tax rates scale.
Fully franked share dividends are the best tax idea introduced in Australian tax system.
Your $18,000dividend income is also below the tax-free threshold, therefore also not subject to
income tax.
But it gets so much better that your term deposit, because shares have what we call fully franked
credits. I will create a separate post to explain in detail this very important aspect of tax system in
Australia. And unlike most other rules in our tax system that favour the high-income earners, this
one works the most for retirees and super funds or pension funds.
The lower your tax rate, the better your benefit - that’s the unintended outcome and a benefit.
To download the book 12 PRINCIPLES OF INVESTING:
ebook.aboutret...
Contact details:
Katherine Isbrandt of About Retirement
Website: aboutretiremen...
Email: hello@aboutretirement.com.au
Or connect with me:
www.facebook.c...
/ katherineisbrandt
/ katherineisbrandt
www.pinterest....
FSG: aboutretiremen...
My Adviser Profile: aboutretiremen...
#KatherineIsbrandt #Aboutretirement #TaxInRetirement

Опубликовано:

15 сен 2024

Ссылка:

Скачать:

Готовим ссылку...

Добавить в:

Мой плейлист

Посмотреть позже

Комментарии : 32

@AboutRetirementTV 6 месяцев назад

Have you considered investing into Aussie shares?

@AboutRetirementTV 6 месяцев назад

@@grumpyoldman. so good to hear that you are taking advantage of this tax system, and your tax benefit and franking credits benefit will only increase in retirement.

@smarttams 2 дня назад

Including the tax return all my working life. Also, the levy fees are quite high so I really only get $12 thousand dollars a year which I still paid tax on.

@VanLe-ex8hr 4 месяца назад

This episode really clarifies something i need to know VERBALLY. Thank you very much for sharing knowledge. You're a real germ.

@allieb7757 6 месяцев назад

Thank you. I learned what franking credits are

@webgenius937 6 месяцев назад

Thanks Katherine

@swolath 6 месяцев назад

I feel so special. Thank you very much. 😘🙏👍

@AboutRetirementTV 6 месяцев назад

So very welcome, I hope this video helps, but as I mentioned, I will create another video explaining the franking credits benefits further, so watch this space Sven 😃

@PhilInAustralia 6 месяцев назад

I look forward to the next video on imputation credits, Katherine. It is a very misunderstood concept. It doesn't help when some politicians are dishonest for political gain (as Labor and Bill Shorten were in the lead up to the 2019 federal election). Imputation credits are simply "tax already paid", a bit like PAYG deductions. They make a big difference to retirees - inside or outside of super.

@phuongnguyen5135 6 месяцев назад

Thanks kate i love Your channel, love watching

@andregelderblom1130 6 месяцев назад

This brings up a question then. Scenario 1 Spend down my super at 100k p/a from age 60->70 Then live off Pension + some dividends from 70+ (45 Pension + 25 Dividend) Scenario 2 Spend down my savings (350k) + super (50k) at 100k p/a from age 60->70 Then live off Pension + Super income stream (45 Pension + 25 super) It seems that franked dividend might give more bank for buck?

@AboutRetirementTV 6 месяцев назад

I love your thinking Andre, but still it is not as straight forward. I am in the process of preparing another video on this topic, as the full explanation and comparison is beyond just one video, so there is more coming 😀

@swolath 6 месяцев назад

Thank you 🙏 thank you 😊 thank you ☺️

@TerryOMalley-ui1cp 5 месяцев назад

Hi Katherine .recently Centerlink changed my disability pension from income based to asset based .I have a rental property and I have looked at your videos but couldn’t find any info on whether capital gains tax which mine is about $145.000 . Is that tax amount deducted in there calculations for there asset value . iam enjoying your videos ,signed up to your newsletter cheers terry

@walters2023 5 месяцев назад

I was looking for a video regarding transition to retirement pension . I just turned 60 yrs. do you have any videos n on that. Thanks

@AboutRetirementTV 5 месяцев назад

Hi Walters, I do have a video on the topic of TTR, this is one of my older videos, but I think it is worth watching: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-15jOpDoXMYM.html

@LukeAdam-Jones 6 месяцев назад

Retirement planning is very important in our world, funny how in some parts of the world, you need over a million dollars to retire comfortably?

@sjdtmv 6 месяцев назад

I thought the grossed up dividend of $25.524 would be taxed on the level of tax after the tax free threshold was meet of $18,200 a difference of $7,314 @ 19 cents in the dollar

@maurotolari9215 6 месяцев назад

Your income is under the threshold, so you do not pay any tax.If your income was $19200, you would pay tax on $1000.which would be $190 off the total franking credits.Note not all shares are fully franked some are partly franked some none.

@bornfree8487 6 месяцев назад

That is correct. Marginal tax rate applies after 18200 then the credits are added back to the tax owing I don’t think the presenters explanation was complete

@VanLe-ex8hr 4 месяца назад

Her assumption is $18k is fully franked dividend. Hence, tax was already paid by company. That's why you get back tax credit. But if the compnay tax rate is less than yours, the tax credit amount should be different. Since you're a retiree the tax rate rate is zeros, i think. She is quite correct.

@walters2023 5 месяцев назад

❤

@pauls8456 6 месяцев назад

Love the videos but the audio on this one sounds like you recorded in a room with hard walls and ceiling causing a hollow echo. Makes it hard to listen to.

@AboutRetirementTV 6 месяцев назад

Yes, I have noticed this, but unfortunately I didn't have the time to re-record it. some issue with equipment, that I only noticed once the video was fully edited. Hopefully will be better next time.

@anniasanchivee6444 6 месяцев назад

Hi Katherine, thank you for your great videos. How about rental income in retirement? Thank you

@AboutRetirementTV 6 месяцев назад

I have aldready done couple of videos on rental properties. watch: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-LHrLbVRaSc8.html and 2nd ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE--Kixk8_OzA0.html

@learningsfromgarden4669 6 месяцев назад

❤❤❤

@wayneharrison 6 месяцев назад

As someone getting ready for retirement, I often run financial scenarios past my wife. She will kiss on the side of my cheek, and say... follow the "K-I-S-S" principle. SO, I ask, what's that? She replies... Keep-It-Simple-Stupid. 😉

@AboutRetirementTV 6 месяцев назад

Yes, your wife is very wise, I also always advise all clients to simplify their finances for retirement, but simplification does not mean sacrificing your benefit. So planning is essential to gain the most our to retirement system in Australia.