ING tool unlocks TTR strategies
ING has created a tool to assist advisers in implementing tax-effective transition-to-retirement (TTR) pension strategies for their older, medium-to-high income-earning clients.
From July 1, TTR rules allow workers aged 55 and over to roll their existing superannuation into an account-based pension, which provides them with a non-commutable income stream that is tax-free once they turn 60.
These clients can still work and can use a TTR strategy to supplement full-time or part-time wages, receive extra tax-effective income or accumulate a considerably larger super nest egg at retirement than they otherwise would.
ING’s online TTR Calculator is designed to help advisers implement such a strategy.
ING technical services manager Rudy Haddad’s advice to those who have reached or are nearing age 55 is to talk to an adviser to ensure significant savings are not missed.
“Under a very basic TTR strategy, a person would work part-time and continue to have compulsory 9 per cent super guarantee contributions made on their behalf,” Haddad said.
“The super income stream would then supplement their salary and lifestyle as they reduced their working hours.
“Clearly, for the best tax outcome, the ideal strategy would be to continue working full-time, aggressively salary sacrifice most of their work salary and live off a TTR superannuation income stream they draw down.
“For benefits received on or after age 60, there is no further tax to pay, so in terms of saving for and investing in retirement, super may provide significant tax savings.”
The new calculator is the latest in a series of financial planning tools launched as part of ING’s SuperCharge campaign.
Recommended for you
The shift in scale and consolidation has led to substantial growth in large privately owned licensees, which have tipped past 20 per cent of advisers for the first time to make up 28.3 per cent of the industry.
ETF providers Betashares and BlackRock are reporting increased flows for currency hedged vehicles, but an adviser has warned on the potential tax implications of changing currency.
Bravura chair Matthew Quinn is to step down later this year, following the exit of CEO Andrew Russell, while its future priority is digital advice in Australia.
Financial advice has an important role to play in navigating family discussions around inheritance, according to CFS, with younger generations expecting a windfall of more than $500,000 while older ones try to meet their retirement needs.
