Case Study 1: easing into retirement
Tom aged 56, works full-time as a real estate valuer. He enjoys his job, but would like to ease into retirement by reducing his work hours, initially to three days a week.
Tom currently earns $65,000 per annum, which equates to a take-home income of $51,425. His part-time (three days a week) income will be $33,615, which equates to a take-home amount of $30,855. His accumulated superannuation balance is $300,000.
By commencing an NCAP when he takes up part-time employment, Tom can make up the annual shortfall of $17,810 per annum. Naturally, drawing down on his preserved superannuation benefits through an NCAP may result in less superannuation when he does finally retire. However, this negative effect may be partially offset by annual superannuation contributions and the fund's earnings, which are tax-free. The NCAP will also be eligible for a 15 per cent tax offset.
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