An introduction to SMSFs
Thursday 27 July 2023 at 11:00 am AEST
What you need to know about setting up and running a self managed super fund. We will take you through the key issues that trustees face when managing their own super fund.
Q: Hi. I am planning to access some of my super as a lump sum when I turn 60 by ceasing employment with my main employer and working part-time with a different employer who will pay me super.
My question is, if I meet the condition of release and withdraw half of my super, does my existing super account stay open and can my second employer contribute to it? Or do I have to convert to a pension account to withdraw half – and then I have a pension acct with a balance that I can access as an income stream, as well as a super account with my second employer that I can’t access until I turn at least 65?
I’m confused about the mechanics of what happens to the super account that I’ll still have money in after withdrawal.
A: If you meet a condition of release after turning 60, you can either commence an income stream or withdraw a lump sum from your super. If you make a partial lump sum withdrawal and leave the rest in the accumulation phase, the earnings will continue to be taxed at 15% on the remaining balance.
Your employer can make contributions into it as it will remain an accumulation account. However, this is general information only and you are best to confirm this with your super fund. If you decided to commence an income stream from your entire current super account, you will have to open a new super account (in accumulation phase) to receive contributions.
When choosing whether to take a lump sum or income stream from your super account, consider getting professional advice from an independent financial adviser or tax professional.
Tax and super can be complicated, so withdrawing all your savings as a lump sum may not necessarily be the best strategy for you, as there can be tax advantages with establishing a retirement income stream.
You can refer to this article for additional information.
In the lead up to retirement many people are considering where to settle to enjoy their post-work life. If you’re thinking of selling your home, a downsizer contribution could be worth a look. Our downsizer webinar goes into the topic in great detail.
Important: All information on SuperGuide is general in nature only and does not take into account your personal objectives, financial situation or needs. You should consider whether any information on SuperGuide is appropriate to you before acting on it. If SuperGuide refers to a financial product you should obtain the relevant product disclosure statement (PDS) or seek personal financial advice before making any investment decisions.