December 2024 Retirement planner newsletter

Where to find retirement income in addition to super

While a healthy super balance is comforting, in practice your retirement income is likely to come from a variety of sources. Read more.

Where to find retirement income in addition to super

While a healthy super balance is comforting, in practice your retirement income is likely to come from a variety of sources. Read more.

Saving for retirement outside super

Super is undoubtedly the most tax effective vehicle for retirement savings, but there are plenty of reasons why you might hold investments outside super to augment your retirement income. Read more.

Saving for retirement outside super

Super is undoubtedly the most tax effective vehicle for retirement savings, but there are plenty of reasons why you might hold investments outside super to augment your retirement income. Read more.

Can I return to work after I access my super?

It’s generally possible to return to work after you retire and start withdrawing your super, but the rules vary according to your age. Read more.

Can I return to work after I access my super?

It’s generally possible to return to work after you retire and start withdrawing your super, but the rules vary according to your age. Read more.

Transfer balance cap (TBC) for super pensions: How it works

The transfer balance cap limits the amount of your super savings you can invest in a tax-free pension for retirement. Read more.

Transfer balance cap (TBC) for super pensions: How it works

The transfer balance cap limits the amount of your super savings you can invest in a tax-free pension for retirement. Read more.

Super after death: How to get it to beneficiaries fast

With super funds taking a year or more to pay families after a death, what can you do to protect your loved ones? Read more.

Super after death: How to get it to beneficiaries fast

With super funds taking a year or more to pay families after a death, what can you do to protect your loved ones? Read more.

SuperGuide members Q&A: December 2024

Thursday 12 December 2024 at 11:00 am AEDT

In this webinar super expert Garth McNally answers recent questions from SuperGuide members.

Find out more

IN CASE YOU MISSED IT: Watch our previous webinar, Advice options for planning your retirement.

Q: If I were to apply a re-contribution strategy after first starting a pension, am I correct to assume that each time I convert money from the accumulation account into a pension that this adds to the transfer balance? For example: $1.0m in taxable component moved to pension, then $360k withdrawn and re-contributed to accumulation before being moved to a second pension to form a $360k pension made entirely of tax-free component. Have I now used $1.36m of transfer balance?

A: Starting a new pension does add to your transfer balance, but lump sums withdrawn from an income stream/pension are subtracted from it.

Using your example, when a pension is commenced with $1 million, then $1 million is credited to the transfer balance account. When $360k is later withdrawn as a lump sum (commutation) from that pension, then that amount is subtracted from the transfer balance account, reducing its value to $640,000.

Starting a new pension worth $360k will again add that amount to the transfer balance, bringing the total back to $1 million.

Importantly, withdrawals taken as income payments rather than lump sums are not subtracted from the transfer balance. It is essential that requests for withdrawals to your super fund are clear about whether the payment should be treated as income or a lump sum (commutation) when the account is in retirement/pension phase because of this.

You can learn more about the transfer balance cap here. If you have a self-managed fund, details on correctly documenting lump sum versus pension payments are available here. Our article on the recontribution strategy may also be of help.

If you’re considering using a financial planner to get your retirement plans on track, the help available from your super fund could be a great place to look.

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.

Superguide Pty Ltd ATF Superguide Unit Trust as a Corporate Authorised Representative (CAR) is a Corporate Authorised Representative of Independent Financial Advisers Australia, AFSL 464629.