Death benefit nominations
Thursday 22 February 2024 at 11:00 am AEDT
This webinar will guide you through the importance of death benefit nominations as they apply to large and small superannuation funds. We will cover what you should consider when making a nomination as well as some of the twists and turns that can unexpectedly occur. This webinar is a must for all super fund members and not just for those who are retired or nearing retirement
Q. How much do I need to have in super to out earn the “danger zone” of earning less than someone collecting both pension and super. I’ve read that Industry Super Australia Modelled a couple who saved more than $875,000 for retirement had $12,000 a year less to spend than if they retired with $400,000? What would be a safe amount over $875,000 to outweigh the deficit?
A. The answer to this depends very much on how much income you can generate from your assets and whether you are prepared to draw down assets to provide retirement income.
Super is designed for you to draw down your asset value to live on in retirement, rather than only living on the investment earnings. If do this, your Age Pension entitlement is likely to increase as you age and your total initial retirement income is very unlikely to be lower than someone who has less saved for retirement.
There is no maximum withdrawal from an account-based pension, so you can choose the level of income you want to top up your Age Pension entitlement, and additional income drawn from such a super pension does not reduce the Age Pension. Rather than assessing your actual income, Centrelink calculate ‘deemed’ income based on the value of your financial assets.
To model your personal situation, a calculator like the Mercer retirement income simulator can help.
The articles linked below explain more about the ‘retirement trap’ you have seen modelled and how to use the Moneysmart calculator.
You could also benefit from personalised advice from a qualified financial planner.
While not the most cheerful of subjects, your death benefit nomination is an important part of superannuation planning. An invalid or inappropriate nomination can cause delays and hardship for your loved ones, as well as undesirable tax consequences. Learn how to make an effective nomination and what to consider when choosing a beneficiary option for a super pension.
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