I am soon to retire, how can I reduce my tax in the meantime?

Q.

I'm a 58 year old male who works full time with an annual salary of $160,000. What is the best way for me to reduce my tax? I'm looking to retire at 60 and need advice on the best way to maximize my retirement income - I've lost $60,000 from my super in the last 12 months.

Talk to your advisor about starting a transition to retirement pension. This would involve salary sacrificing up to $100,000 into super where it would lose just 15% entry tax. Your tax would drop from $50,000 a year to $18,000 a year so you would be saving an initial $32,000 but when you factor in the $15,000 contributions tax you are still saving $17,000 in tax overall. Obviously, this will cause a big reduction in your after tax income but you could then start a transition to retirement pension which would take up any shortfall in your available cash for living expenses.