Hitting 60 is this magically twilight time that happens for a short period and should not go unchecked. This twilight period is when your superannuation is able to receive money in and draw money out (rules and limits apply of course).
Meet Linda aged 59 and Roger aged 63. Both are working fulltime; Roger manages a sales team earning $80,000pa and Linda is a nurse earning $106,000pa. Linda loves her job but geez her legs aren't what they used to be. She isn't sure how long she will be able to keep working. Roger is happy to keep working until 67 or maybe even longer. They have 3 adult children and have been wondering if they should be doing more with getting money into super for their retirement. A lot of their friends have self-managed super funds and they never went down this path because they didn't think they had enough in super. Roger has $120,000 in super and Linda has $140,000. Poor Roger has missed 3 years in his twilight years, however, we were able to set Linda up to enjoy this period to their fullest.
We used the tricky recontribution strategy within the Super rules for Transition To Retirement (TTR) to set Roger and Linda up with a super income stream. No change to what they have to spend each month. How? By drawing tax-free income from Super and then making a contribution to super (this is the tricky part) we reduced their taxable income (less money to the tax man and more money to super, with ScoMo's approval!). Part of this scenario we included the consideration for Linda to reduce her hours at age 62 to 25 hrs, allowing her to work until age 67.
Overall, the benefit of this advice was they maintained their current income, boosted both their Super balances and were able to reduce Linda's work hours in the future! There is 3 years of this strategy that Roger cannot recover, it is done; a missed opportunity. On the flip side, if Roger works until 70 he can continue with this strategy. Don't leave opportunities on the table, grab them with both hands!
