With your children grown and retirement on the horizon, this is the perfect time to fine-tune your financial position. Strategic tax planning now can reduce your tax, boost retirement savings, and ensure a smoother transition into retirement.
Here’s what every empty nester and pre-retiree should know.
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Maximise Super Contributions
Both concessional (pre-tax) and non-concessional (after-tax) contributions can help you build a larger retirement nest egg while reducing your taxable income:
- Concessional contributions: Up to $30,000 per year are generally tax-deductible, lowering your taxable income.
- Non-concessional contributions: After-tax contributions up to $120,000 per year can help you boost super balances further.
Hack: If you haven’t reached your caps in previous years, you may be able to bring forward non-concessional contributions. This can help you catch up on super savings before retirement.
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Take Advantage of the Downsizer Contribution
If you’re 55 or older, selling your family home can provide a once-off opportunity to contribute up to $300,000 per person to super from the proceeds — without counting towards your contributions cap.
Hack: This is ideal if your super balance is lower than desired and you have capital tied up in property. Plan ahead and consult your accountant to make sure you meet all eligibility criteria.
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Plan Investment Sales Strategically
Pre-retirement is the right time to consider timing asset sales:
- Capital Gains Tax (CGT) planning: Selling assets in a year when your income is lower can reduce your CGT liability.
- Offsetting gains with losses: Consider whether you have investments with capital losses that can offset gains.
- Hold periods: Assets held for more than 12 months may qualify for the 50% CGT discount.
Hack: Don’t wait until after the sale — planning ahead ensures you make the most of CGT concessions and reduce tax exposure.
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Review Super Withdrawal Strategy
As retirement approaches, understanding how and when to access super is essential:
- Pre-retirement withdrawals may be taxed at a lower rate depending on your age.
- Account-based pensions are generally tax-free once in retirement (within transfer balance caps).
Hack: Coordinate withdrawals with other income sources to minimise tax and maximise cash flow in your retirement years.
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Keep an Eye on Government Benefits
Empty nesters may be eligible for age-based benefits and rebates, such as:
- Seniors and pensioner tax offsets
- Age Pension considerations if part-time work continues
- Government incentives for downsizing or super contributions
Hack: Plan withdrawals, contributions, and investment sales with these benefits in mind to optimise overall financial outcomes.
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Record-Keeping is Essential
At this stage, keeping accurate financial records is vital:
- Track all super contributions and eligible deductions
- Maintain records of asset sales, capital gains, and losses
- Document investment income and withdrawals
Hack: Accounting software or a simple digital filing system ensures all relevant information is available for strategic decisions and tax compliance.
The Bottom Line
Empty nesters and pre-retirees have unique opportunities to optimise their tax position and retirement savings. By maximising super contributions, taking advantage of downsizer contributions, planning investment sales, and keeping excellent records, you can reduce tax, boost retirement wealth, and make the transition into retirement smoother.
At Lemonade Beach Accounting, we help Australians in the pre-retirement stage navigate complex tax rules, maximise deductions, and plan for a secure financial future.
Ready to Optimise Your Pre-Retirement Finances?
Book a Tax Planning Appointment with Lemonade Beach today — we’ll help you align your super, investment sales, and tax planning to step confidently into retirement.
FAQs: Pre-Retirement Tax Planning for Empty Nesters in Australia
How can I maximise super contributions before retirement?
You can make concessional (pre-tax) contributions up to $30,000 per year, which are generally tax-deductible, and non-concessional (after-tax) contributions up to $120,000 per year. Bringing forward unused caps from previous years can help you boost your super before retirement.
What is the Downsizer Contribution?
If you’re 55 or older, selling your family home that has been owned by you for at least 10 years you may be able to make a once-off contribution of up to $300,000 per person into super from the sale proceeds. This contribution does not count towards your usual contribution caps. There are eligibility, timing requirements and paperwork involved so talk to your accountant or financial planner early (before listing) to ensure you tick all the boxes.
How should I plan investment sales in pre-retirement?
Timing is key. Sell assets in years when your income is lower to reduce capital gains tax (CGT), offset gains with any capital losses, and hold assets for over 12 months to qualify for the 50% CGT discount.
When should I withdraw super before retirement?
Pre-retirement withdrawals may be taxed at a lower rate depending on your age. Coordinating withdrawals with other income sources and understanding account-based pension rules can minimise tax and maximise cash flow.
Are there government benefits for empty nesters that affect tax planning?
Yes. Seniors and pensioner tax offsets, age pension considerations, and government incentives for downsizing or super contributions can impact your overall financial position. Planning contributions, withdrawals, and investment sales with these in mind can optimise outcomes.
Why is record-keeping important in pre-retirement?
Tracking super contributions, asset sales, capital gains/losses, investment income, and withdrawals ensures compliance and supports strategic tax planning. Using accounting software or a simple digital filing system can simplify this process.
Want to see what tax strategies are right for the next stage of life? Check out our guide for Retirees.
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