In this episode, Campbell Wallace tackles one of the most overlooked yet significant taxes in retirement planning: the 17% superannuation death benefit tax. While Australia doesn’t have a formal inheritance tax, this “sneaky tax” can quietly strip hundreds of thousands from your estate if left unmanaged, particularly when adult children inherit super balances with large taxable components. Campbell explains why this tax exists, who it applies to, and how to work around it using smarter strategies.
He breaks down the traditional recontribution approach and explains why it often falls short. More importantly, he introduces a smarter alternative, using two super accounts to isolate taxable and tax-free components. This technique can reduce, or even eliminate, the death benefit tax in under a decade, saving families significant sums. Campbell also covers real-life examples, contribution caps, expected returns, and the modest costs involved compared to the tax savings.
Listeners will also learn the importance of reversionary pensions, binding death benefit nominations, and integrating estate planning structures like testamentary trusts. If you’re nearing retirement or want to ensure your super passes to your family, not the ATO, this episode is a must-listen, packed with practical strategies and long-term benefits. A little planning now can go a very long way.
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IMPORTANT: This podcast provides general information about finance, taxes, and credit. This means that the content does not consider your specific objectives, financial situation, or needs. It is crucial for you to assess whether the information is suitable for your circumstances before taking any actions based on it. If you find yourself uncertain about the relevance or your specific needs, it is advisable to seek advice from a licensed and trustworthy professional.