Tax-Smart Strategies Before and After Retirement

Are you paying more tax than you need to?

I often meet Principals who are surprised by how much tax they could be saving, especially in the years leading up to retirement. With the right planning, you can make your money work harder and keep more of it in your pocket.

Here are three areas where smart tax strategies can make a real difference:

1. Super Contributions

Salary sacrifice and personal contributions can reduce your taxable income while boosting your retirement savings. Are you using the right mix?

Example: A Principal earning $180,000 who salary sacrifices $15,000 into super may reduce their taxable income while increasing their retirement savings. Because concessional super contributions are generally taxed at a lower rate than employment income, this strategy can create meaningful tax savings while helping build long-term wealth.

The earlier you start, the more time your money has to benefit from compounding returns within the superannuation environment.

2. Leave Entitlements

Long service leave, annual leave and redundancy payments can attract unnecessary tax if not managed carefully. Timing and structure matter, and a little planning can make a significant difference.

Example: A Principal planning to retire in the next 12 months may have a substantial long service leave balance. Depending on when the leave is taken or paid out, and how it aligns with other sources of income, there may be opportunities to reduce the overall tax impact. Without planning, the payment could be added to an already high-income year, potentially resulting in more tax than necessary.

Understanding your options before retirement can help you make informed decisions and avoid costly surprises.

3. Retirement Income

Once retired, how you draw income from your super can affect how much tax you pay. A well-structured pension strategy can help you maximise income and minimise tax.

Example: Two retirees may have the same super balance, but very different outcomes. One may leave their super in an accumulation account, while the other moves eligible funds into a retirement pension account. By structuring their retirement income appropriately, they may benefit from a more tax-effective arrangement and potentially enjoy a higher after-tax income.

The way you access your super can be just as important as the amount you've accumulated.

Planning Ahead Pays Off

Many of the best tax-saving opportunities occur before retirement, when there is still time to structure contributions, review leave entitlements, and develop a retirement income strategy.

Small adjustments made today can result in significant benefits over time, helping you keep more of your hard-earned money and retire with greater confidence.

At Frontier, I work closely with school leaders to tailor strategies that suit your career, financial goals, and lifestyle. If you're approaching retirement, now is the time to plan smart.

Book your review today by clicking on my booking link here: 

https://frontierfg.com.au/book-an-appointment

Or contact me directly at Melina@frontierfg.com.au or (03) 9671 4550.