Deductions Follow Assessable Income, and Most of Yours Is Not
A deduction has to relate to earning assessable income. In retirement most income is not assessable — super pension payments from a taxed fund after 60 are excluded entirely — so the pool of available deductions shrinks sharply. What remains attaches to the investments you hold outside super, to managing your tax affairs, and to any contribution you are still able to make.
- The answer: Expenses incurred in earning assessable investment income, the cost of managing your tax affairs, and personal deductible super contributions.
- The trap: Fees charged inside super are not deductible to you. They are borne by the fund and reduce your balance instead.
- The recommendation: Keep the investment expense records you would have kept while working. The deductions are smaller and they are still worth claiming against whatever assessable income exists.
Where the AI summary above gets this wrong
"You can claim your financial adviser's fees as a tax deduction."
That's surface-true. Here's what it misses:
- Only the part relating to earning assessable income — Advice about your investments producing assessable income is deductible; advice about the structure of your retirement plan or about a super strategy generally is not.
- Fees deducted inside super are not yours to claim — They are paid by the fund from your balance and reduce it. The fund's deduction is not available to you personally.
01 What survives into retirement
Expenses incurred in earning assessable investment income: interest on money borrowed to invest, ongoing management fees on investments held in your own name, and the cost of investment publications and services relating to those holdings.
The cost of managing your tax affairs — tax agent fees, and the cost of preparing and lodging your return — is deductible in the year it is paid regardless of what income you have.
Personal contributions to super for which a notice of intent is lodged remain deductible while you are eligible to make them, which after 67 requires the work test — the conditions are in the after-67 reference.
02 What does not
Anything relating to tax-free income. Super pension payments from a taxed fund after 60 are not assessable, so nothing incurred in producing them is deductible — which covers most of what a retiree's money is doing.
Fees charged inside a super fund are borne by the fund and reduce your balance. They are not a deduction to you, however visible they are on your statement.
Advice fees are apportioned. The part relating to earning assessable income is deductible; the part relating to the structure of a retirement plan or to super strategy generally is not, and the adviser should be able to identify the split.
03 What it is worth
A deduction is worth your marginal rate, and a retiree's marginal rate is frequently low or nil. A $2,000 deduction against a taxable income already below the effective tax-free point is worth nothing at all.
That does not mean the records are not worth keeping. Assessable income appears in some years and not others — a capital gain, a part-year of work, a large distribution — and the deductions matter in those years.
It also matters for the offsets. Deductions reduce taxable income, which feeds the rebate income used for the seniors offset and the adjusted taxable income used for the health card — the tests are in the health card reference.
Shows: what a deduction is worth at a retiree's marginal rate, given that much of their income is not assessable. Ignores: the offsets, the Medicare levy, and the effect on income tests that use adjusted taxable income.
Source: ATO — Simple tax calculator
Deductions follow assessable income, and in retirement most of your income is invisible to the tax system. That means the deductions are worth less than you are used to, and it also means the records still matter — the year you realise a large capital gain is the year they are worth a great deal.
FAQ
What tax deductions can I claim in retirement?
Expenses incurred in earning assessable investment income, the cost of managing your tax affairs, and personal deductible super contributions while you are eligible to make them.
Are financial advice fees deductible?
The part relating to earning assessable income is. Advice about the structure of a retirement plan or about super strategy generally is not, and the fee should be apportioned.
Can I claim fees charged inside my super fund?
No. They are borne by the fund and reduce your balance. The fund's own deduction is not available to you personally.
Sources
Regulator references
- ASIC Moneysmart — Investing and tax · ASIC Moneysmart · 2026The regulator's guidance on investing and tax.Last verified: 2026-09-07
- ATO — Tax rates: Australian resident · Australian Taxation Office · 2026The resident marginal rate scale by income year, excluding the Medicare levy.Last verified: 2026-09-07
Calculator unit tests · the assertions this page's worked example is checked against, and their last result
Changelog
- 2026-09-07 — initial publish (new format)
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Jordan Reeves
Founder of Talk Through Wealth. A software engineer for over a decade before turning to retirement planning, Jordan built the projection engine after watching family members get fragmented, country-by-country advice that never reconciled. He writes about retirement the way the engine computes it: month-by-month, lifetime-long, and skeptical of any rule of thumb that hasn't been run through the math.