What advice can I get from my super fund in retirement?

Under current regulations, there are two types of financial product advice – general advice and personal advice.

General advice means your personal circumstances are not considered – the advice is not tailored to you. Most super funds provide general advice, and it can help you make good decisions about your super. What general advice can’t do is recommend the best course of action for you personally.

Personal advice is tailored to you. The adviser will collect information about your financial situation and goals and make a recommendation. Most super funds also offer personal advice, but it may come with a fee attached and/or may cover limited topics.

Your fund may provide personal advice through digital tools that can give you a personalised recommendation (robo-advice), employ ‘in-house’ financial advisers to give personal advice to members or refer you to an external panel of advisers. Many funds use more than one delivery model, for example, robo-advice for simple issues and human advisers for more complex situations.

Reform is underway to introduce a new type of financial adviser who can provide fee-free personal advice on behalf of financial product providers such as super funds. When these new advisers become available, their advice is likely to be suitable for people with simple personal circumstances.

Advice about super in retirement

If your super fund offers personal advice, it will (at a minimum) cover your super, including both accumulation and retirement phase (pension) accounts.

In retirement, this advice covers three broad categories:

• How to invest your super
• Making contributions
• Making withdrawals.

In the investment space, you may be able to receive a recommendation on the most suitable investment option (or mix of options) for you from your fund’s menu. Perhaps the mix you chose at retirement is no longer suitable, or maybe you have a bucket strategy in place that needs adjustment. It’s recommended you periodically review your investments and make any changes as your needs, risk tolerance and goals change over time.

Advice about making further contributions

Retirement doesn’t always mean the end of contributing to super.

There are a few opportunities open to retirees that your fund is likely to offer advice about. One of these is the option to make a downsizer contribution if you sell your home. This is available to anyone aged 55 and over and has no maximum age limit, providing a welcome opportunity to add to super and generate additional retirement income.

If you’re aged under 67, or you’re 67–74 and can meet the work test, you can make concessional (tax-deductible) contributions to super. This type of contribution can be beneficial if you have income that will be taxed at a rate higher than the 15% rate that applies to concessional contributions. You might fall into this category if you’re working in retirement, you have income from investments outside super or you’ve sold a property or another asset and made a capital gain.

Anyone under 75 may also make non-concessional contributions to super, so it’s worth seeking advice if you have a lump sum to invest or want to minimise tax for your future beneficiaries. The bring-forward rule could allow you to make a significant contribution and a recontribution strategy could help with estate planning.

Advice about making withdrawals

When it comes to withdrawals, you might want advice about changing your annual pension payment, starting a new pension or making a lump sum withdrawal. An adviser can complete modelling to estimate the impact on your retirement income and how long your pension may last.

Many people also need advice if their spouse passes away and leaves them a super pension, as this can cause issues with the transfer balance cap and Age Pension entitlements.

If you have a super pension but also have money in the accumulation phase, you may need advice on whether to move everything to the retirement phase and, if so, how best to achieve that.

Money can’t be added to an existing pension, so advice will consider whether to commence a second pension or stop (commute) the existing pension to combine the money and start a new pension with a higher balance. If you have a pre-2015 pension, commuting it can impact your Centrelink and aged care means testing, so advice is critical.

There’s always the possibility that your fund’s advice service doesn’t fully cover all these topics, but it’s worth asking; you may be able to receive free or low-cost advice in comparison with a higher-cost full-service adviser.

Advice about other topics

Less commonly, your super fund may offer advice about your assets outside super and other issues such as comprehensive estate planning, maximising your Centrelink entitlements, and aged care needs, including how to fund costs (e.g. selling the family home to pay a lump sum accommodation deposit or taking out a reverse mortgage).

Fees for this type of advice can’t be paid out of your super account, so you will need to pay ‘out of pocket’, although as a retiree, you could, of course, make a withdrawal from your super to pay the bill.

Funds that employ their own full-service financial advisers are most likely to offer this type of comprehensive advice. If your fund doesn’t, you may want to find your own adviser.

In estate planning matters, solicitors can also often help with the preparation and impacts of wills, enduring powers of attorney and advance care directives.

Next steps

If you need some advice, get in touch with your super fund to find out what they can offer you and how they charge for the service.

If you need help your fund can’t provide, find out if they can recommend a suitable adviser or consider searching for independent assistance.

Shifting the focus from planning for retirement to planning in retirement is a change of perspective that can pay dividends and ensure you remain comfortable with your strategy.