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In your weekend report you said “I’m over 55 and on a transition to retirement pension to ensure the lowest, legal amount of tax. If you’re over 55 and not doing this, then you’re possibly as crazy as those short-term traders, who sold off when the Fed boss, Janet Yellen, made her rookie Chairman mistake alluding to an interest rate rise around mid-2015.”
I am also over 55 but don’t see where the TTR tax advantages are if you still have a full time job and are hit at the end of the year with income tax on the amounts you take out of the SMSF as TTR – or am I missing something?
Would appreciate your views.
A: The main reason you do the TTR is to get your super into a “tax free” state. While you will have a little tax to pay on the withdrawal, you generally take out the minimum amount (4%) as a pension, and recontribute this back into super (subject to the concessional cap).
Have a look at our website for a worked example on the income swap strategy using a TTR pension.
I hope this helps.
