US/AU Pension Ages and Tax Implications

US Social Security Age: 62 (When the full benefit age reaches 67, benefits claimed at age 70 will be 24 percent higher because of that delay). We’re both eligible as we’ve both accumulated the full 40 credits each (10 years of employment in the US). It’s taxable. The key to reducing taxes on your Social Security benefit is to reduce the amount of taxable income you have when you retire, but not to reduce your total income.

US 401K (Age 59.5)(Taxed as ordinary income). We withdrew and distributed our whole 401K plans prior to becoming Australian PR as the 401K rules do not apply in Australia as the 401K is considered a Trust Account.

Roth IRA: Since we work overseas and file our taxes with FTC, we’re not eligible to contribute. We withdrew and distributed our whole Roth IRAs prior to becoming Australian PR as the Roth IRA rules do not apply in Australia as the Roth IRA is considered a Trust Account.

AU Super (Preservation Age (55 if born prior to 1 July 1960), have retired and have no intention of returning to work.) Transition to retirement income stream (TRIS). If you are under 65 years old, you can access between 4–10% of the balance of money in your super account each financial year. Age 60 no restrictions.

AU Pension Age (Age 67)(Residence rules, income test, assets test). Pension payouts are dismal if you have investments outside of your super, even as a home owner as a married couple. It’s like the government doesn’t want us to invest or have much money in our Super. Otherwise, $20,119 per annum. However, we most likely won’t be relying nor be eligible to receive AU Pension.

Although Kathy and I aren’t eligible for pension yet, we’re definitely planning to hire a Financial Advisor (or DIY myself as an Expat), to determine the best methods to utilize the benefits.