Starting an account based pension with your super when you retire could enable you to receive a tax-effective income and make your savings last longer.
HOW DOES THIS STRATEGY WORK
When you retire, it can be tempting to take your super as a cash lump sum. However, using your super to start an account based pension1 could be a more tax-effective option.
This is because:
- no tax will be payable on earnings in the fund2
- you can receive $52,5453 pa in tax-free income between your ‘preservation age’4 and 59 in 2019/20, and
- when you reach age 60, the pension income payments will be completely tax-free5 and you don’t have to include these amounts in your annual tax return.
|Maximum taxable income that can be received tax-free (pa) in 2018/19|
|Age||From investments held outside super||From account based pension (taxed fund)|
|Preservation age4 to 59||$21,5956||$52,5453|
|60 to Age pension age7||$21,5966||Unlimited tax-free5 income
payments. Also, you don’t
have to include the income
payments in your annual
|Age pension age7 and over||$32,9158 (for singles) and
$29,6118 (per member of
Your Westlawn Financial Adviser can help you assess all the issues that need to be considered and determine whether an account based pension suits your needs and circumstances.
Contact us today:
- Call (02) 6642 0433
- Email email@example.com
¹ There is a limit on the total amount that can be transferred to retirement phase in a person’s lifetime. This limit is $1.6 million in 2019/20 (subject to indexation).
² Assumes you are in retirement phase.
³ Takes into account low income tax offset, low and middle income tax offset and 15% pension tax offset as at 1 July 2019, and assumes no other income is received.
⁴ Preservation age is 55 for those born before 1 July 1960 and gradually increases to 60 depending on date of birth.
⁵ Assumes the pension is commenced from a taxed super fund.
⁶ Takes into account low income tax offset and low and middle income tax offset as at 1 July 2019.
⁷ Age where you become eligible for age pension.
⁸ Takes into account low income tax offset, low and middle income tax offset and seniors and pensioners tax offset as at 1 July 2019.
General Advice Disclaimer
All of the material published on this website is for information purposes only and does not constitute advice. This information is of a general nature only and has been provided without taking account of your objectives, financial situation or needs. Because of this, we recommend you consider, with or without the assistance of a Financial Adviser, whether the information is appropriate in light of your particular needs and circumstances.
Westlawn Wealth Management Pty Ltd ABN 32 124 861 409 Corporate Authorised Representative of Affinia Financial Advisers Limited ABN 13 085 335 397 AFSL No. 237857. Please note that Affinia Financial Advisers Limited is not responsible for the advice and services provided by Westlawn Finance Limited, Westlawn Insurance Brokers Pty Ltd, Westlawn Life Insurance Pty Ltd or Westlawn Business Services Pty Ltd.