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10 highlights from the 2012 Federal Budget

  1. No Company Tax Cut as previously promised
  2. Family Tax benefit A increases payments to families and individuals on welfare
  3. No standard deduction on company tax for small businesses
  4. New Schoolkids bonus scheme for education expenses
  5. Super high contributor’s tax for over 50’s earning greater than $300,000 per year
  6. Funding for GST additional compliance extended
  7. Deferral of contributions cap increase for over 50’s with low super
  8. No 50% discount on interest income
  9. Company loss carry-back scheme to receive refund on tax paid in prior year
  10. New Income support supplement for workers with children

Posted on 11 May '12 by , under Business.

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Transition to retirement

The transition to retirement (TTR) strategy allows you to access some of your super while you continue to work.

You are able to use the TTR strategy if you are aged 55 to 60. You can use it to supplement your income if you reduce your work hours or boost your super and save on tax while you keep working full time.

  • Starting a TTR pension: To start your TTR pension, transfer some of your super to an account-based pension. You have to keep some money in your super account so that you can continue to receive your employer's compulsory contributions as well as any voluntary contributions you may be making.
  • Government benefits and TTR: The benefits you or your partner receive might be impacted if you choose to opt for this strategy. How and what exactly will change might become clearer upon discussing this with a Financial Information Service (FIS) officer.
  • Life insurance and TTR: In some cases, the life insurance cover you have with your super may stop or reduce if you start a TTR pension – check this before making any decisions or changes.

TTR can help ease your mind as you transition into retirement but it can be a bit complex. Before you choose whether you want to use TTR to reduce work hours or save on tax, or even if you want to use TTR altogether, you should figure out how this will impact all aspects of your finances.

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