I am expecting to receive $500,000 from TPD due to illness
I also have $300,000 in Super
I am only 54yrs and my preservation age is 58yrs
My question is how to minimise the tax on the 500k
Do I transfer to super (concerned with the contributions Cap or only make a partial withdrawal
Could you please explain the options ?thanks

Hi Mike,

I'm not a Financial Planner, I'm a Mortgage Broker but if you would like to ask George Hlawaty from Vista Financial Group on 03 9598 8002 I'm certain he could answer these questions for you.

Cheers,

Michael Budge
Director
Bayside Finance Group

Hi Mike,

TPD payouts is a complicated area with the tax on the proceeds if taken as a lump sum based on a formula. Depending on where you hold the TPD insurance you may not actually have to cash the full benefit out (which can limit any tax payable) and instead take it as a pension - regardless of your preservation age.

You'll get different tax outcomes depending on lump sum payout Vs pension option.

You then need to give consideration to what you are going to do with the insurance payout & your super - this is designed to support your life & so should be thought of carefully.

This is one area where you should really get professional financial advice & ideally before you receive the payout as once you get the payout it may be too late to do anything.

I can assist if you if you need. Please don't hesitate to reach out.

Regards
James