In Feb I cancelled my existing SS (salary sacrifice) arrangement as I needed to boost my salary for the investment mortgage approval process, and would also need additional cashflow to service the investment property loan (as the IO monthly payments and expenses and more than the rental income). However, this meant that my total concessional contributions into super last FY was about $6K less than the 'cap' of $27,500.
To remedy this tax inefficiency without causing myself cashflow issues I've decided to commence a Transition To Retirement (TTR) TRIS pension account within out SMSF. There is no tax benefit within super (as I am under 65 and still working I can't move any of my super balance into 'pension phase' - although I think the $10K of super money I used to purchase a deferred lifetime annuity was counted as $10K of my TBC).as the TRIS pension account won't move into 'pension phase' until I hit age 65, so will still be taxed at 15%.
But it will mean that the minimum 4% pension withdrawal (based on the TRIS account starting balance as at 1/7/23) will be paid to me tax free, and I can use this additional income to afford to make personal deductible super contribution of a suitable amount to ensure my total concessional super contributions hit the $27,500 cap this FY. My SGL contributions this year will be around $12,650 so I will probably need to make a deduction super contribution next June of around $14,850 to reach the CC limit. I have requested the TRIS to be commenced from 1/7/23 with $300K of my SMSF balance, so the min pension payment this FY will be $12,000. That pension payment will cover most of the amount needed for the personal super contribution.
As this will reduce my taxable income by $14,850 and increase my concessional super contributions by the same amount, the overall impact will be $2,227.50 additional tax paid by our SMSF, and $4,826.25 less income tax payable by myself. So the overall tax saving will be around $2,600.
eSuperfund will calculate the TRIS account balance for 30 June each year, so I will know how much I need to withdraw as a pension payment in future years.
When I turn 65 the TRIS (whatever it's current balance is) will automatically be moved into 'pension phase', and I can also transfer my accumulative phase SMSF account balance into pension phase at that time.
Depending on what my total SMSF balance is when I turn 65, I might need to rollover some of my super from my other super accounts so the entire TBC (whatever it is at the time) gets used for the initial 'pension phase' account balance in the SMSF. [I am being optimistic that I might have a total super exceeding the TBC by the time I reach 65].
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