Achieve tax efficiency in your retirement planning

It is a common misconception that retirement planning is something you start to ponder on when you are approaching the retirement age. Pursuant to Section 4 of the Minimum Retirement Age Act 2012, the minimum retirement age of an employee in the private sector is 60 years. So, when should one start to structure his retirement plan? The answer is the earlier, the better! That being said, most (if not all) messages revolving around the concept of retirement is more often than not about “whether you prepared enough money for your retirement”.

By starting early, you could maximise the benefit of compounding and at the same time, take the advantage of spreading the risks over a longer period of time. If you are in your early forties, this means that if you start planning now, you have approximately 20 years to realise your retirement goals. Good retirement planning also means that such a plan is also tax efficient. Thus, it is important to be aware of the tax treatment of investment income and tax exemptions available under the prevailing tax law. Below is a discussion on the relevant tax treatment to assist you in making an informed decision on the structuring of a tax efficient plan while meeting your retirement goals.
 

Source: SmartInvestor

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By Joanne Tan
Joanne Tan is a managing consultant of Tricor Taxand Sdn Bhd, an entity within the Tricor Group. The Tricor Group operates in 21 countries / territories and across a network of 47 offices.