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Financial Tips For Tax Time 


It’s almost time for taxpayers across the country to fill out their return forms as the financial year comes to a close. There are a host of reasons why lodging a tax return is necessary, irrespective of one’s income being above or below the tax-free threshold. To assist you through tax time, we speak with financial adviser Nikki Booth from My Wealth Solutions about the importance of planning ahead, budgeting, and why seeking advice from a professional is a must.

Remembering the year that was

As June 30 – the end of the financial year – approaches, it can be beneficial to think about your expenses from the year before. Regardless of whether your working days are long behind you or if you’re just about to retire, Nikki says reflecting on the previous financial year can help you properly plan for the future.

“Generally, retirees do not have much – or any – income to pay tax on, because if they are over 60 and on an account-based pension, all of the income and earnings are tax-free,” she says. “I would encourage looking back on your spending in the last year to ensure you can plan accordingly for the new financial year.”

It’s also a great time to sit down with an accountant to discuss your superannuation situation, as well as any other investments or assets you may have.

“For retirees with an account-based pension, making sure you have drawn the minimum pension for the financial year is extremely important,” she says. “If you hold investments outside of super that have produced assessable income, having a chat to your accountant to look at ways to minimise the tax payable on these assets is also going to be beneficial.”

“Another thing to consider is estate planning and if you are happy to spend all of your money or leave some for the kids,’ Nikki adds. “This also means thinking about any tax consequences of estate money and how to minimise these for your children when they receive the inheritance.”

Plan ahead

Those wishing to retire within the next few years should plan their finances well in advance. This includes ensuring your post-retirement living expenses are feasible, and that your superannuation account has sufficient funds in order to live comfortably.

“You’ll need to consider your living costs to ensure that your money is going to last,” Nikki says. “Get as much money into your super as possible leading up to retirement, as it is the most tax-efficient environment for your money. If you are under 65 or using the downsizing rule, consider if there is scope to contribute any additional funds into the super environment.”

People receiving a super pension or income stream in retirement must withdraw minimum amounts each year. These amounts can vary from 4–14 per cent, depending on the recipient’s age. “Make sure that the minimum pension has been drawn out,” Nikki suggests. “Also, if there are any funds still in the accumulation phase, assess whether it needs to be in accumulation or if it would be better off in an account-based pension.”

Set yourself up for success

The majority of your cash inflow in retirement will be from pension and investment income, but your cash outflows – basic living costs such as rates, insurance, gas, electricity, and telephone bills – will likely be quite large.

You’ve worked hard your entire life, so now it’s time to live comfortably in retirement – without the fear of running out of money! If you’re retired, or plan to retire shortly, it’s important to prepare a simple budget of your cash flow, both in and out. This will allow you to monitor your spending habits, allowing you to plan ahead in life with confidence.

“Have a realistic budget in place to follow that accounts for daily living expenses, as well as the ‘nice to haves’,” Nikki says. “Treat your pension income like a wage from employment, and break it up into separate accounts for your fixed expenses and discretionary expenses to ensure that you are not over-spending.”

Alternatively, you can aim to accumulate wealth by investing in assets, such as property or shares. These investments have the ability to increase in value and provide a steady income. Also, if you borrow money to purchase these assets, the interest incurred is generally a tax-deductible expense.

Seek financial advice

Enlisting a good financial adviser or registered tax adviser can help steer you in the right direction when attempting to manage your assets at tax time. They can also advise whether you qualify for any benefits to supplement your income, and how you can claim them.

“One of the biggest risks in retirement is that you might run out of money at some point, so having a professional work with you to ensure your funds last the longest and your needs are met is critical,” Nikki says. “They will also be able to help you maximise any social security entitlements that you may be eligible for.”

Nikki also says a financial planner is qualified to provide proper advice when it comes to investing to ensure you get more bang for your buck.

“A good adviser will be able to help you structure your assets correctly in retirement to maximise growth, but also to minimise downside risk,” she says.

Finally, Nikki suggests finding a reputable consultant well in advance, even if retirement is merely a speck on the horizon.

“The earlier you seek out an adviser, the better – even if you are still 15 to 20 years away from retirement,” she says. “It will allow much more time to have the correct structures in place for the future.”

As the end of the financial year approaches, now is the perfect time to reassess your finances and make the most of your hard-earned cash in retirement. After all, you’ve sowed the seeds – now reap the harvest!


The information provided in this article has been provided as general advice only. We have not considered your financial circumstances, needs or objectives, and you should seek the assistance of your financial adviser before making any decision regarding any products or services mentioned.

Any general advice has been provided by Nikki Booth – Financial Adviser at My Wealth Solutions Pty Ltd ABN 66 153 751 832 is a Corporate Authorised Representative of GPS Wealth Ltd | AFSL 254 544 Australian Credit Licence 254 544 ABN 17 005 482 726

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