Question
Sophie's friend Bethany is 59 years old and continues to work. Bethany's superannuation balance of $400,000 is in a transition to retirement pension account and
Sophie's friend Bethany is 59 years old and continues to work. Bethany's superannuation balance of $400,000 is in a transition to retirement pension account and comprises $100,000 tax- free component and $300,000 taxable component (from a taxed source).
Provide a clear explanation to Bethany for each of the following.
a.Assuming that Bethany's fund produces an investment income return of 6% for the 2017-2018 financial year, explain the tax treatment of the return.
b.If Bethany withdraws pension payments totaling $20,000 for the year, how will this be treated for tax purposes?
c.When Bethany turns 60 and continues to withdraw $20,000 for the year, how will the withdrawal be treated for tax purposes?
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