Many people start using their super savings as soon as they retire and can access their super, but you don't have to. If you have other income sources or savings to live on, you could leave your savings in your super account. This means your money stays invested and could continue to benefit from investment returns.
If your personal marginal tax rate is higher than 15% due to your investment or working income, you may want to leave your super in the accumulation phase. For example, say your income from work or non-super investments is sufficient to fund your lifestyle but you start a super pension anyway.
Depending on your fund's rules, you may be able to withdraw some or all of your superannuation (super) as a lump sum. If so, you can take all your super in one go, or as several lump sum payments. Ways of using a lump sum include: clearing debt (for example, paying off your mortgage)
When a person retires after reaching their preservation age2, they can request their superannuation monies to be moved to an account-based pension structure. In other words, they can request their superannuation to be moved from accumulation phase, to drawdown (or pension) phase.
Similar to an Account Based Pension, an individual uses some or all of their accumulation account balance to start a Non-Commutable Account Based Pension. Unlike an Account Based Pension, a member is not required to meet a full condition of release to commence a Non-Commutable Account Based Pension.
Accumulation 1 offers simple super that you can keep throughout your working life, even when you change jobs. It offers investment choice and flexible insurance cover. The Defined Benefit Division (DBD) aims to offer stable and reliable growth over your working life, as well as greater protection from market downturns.
Those approaching retirement who want to draw an income when they retire but hold the accumulation share class can switch to the income share class.
Can I Get the Pension if I Have Super? Having superannuation savings does not deny you from receiving Age Pension payments. Eligibility for the Age Pension is based on an Assets Test and an Income Test.
You can withdraw your unrestricted non-preserved component in the Accumulation Plan as cash at any time subject to the following. You can make lump sum withdrawals up to $50,000, once in seven days, from your Accumulation Plan at any time on your Members Online account until your balance is paid out in full.
A monthly pension payment gives you a fixed amount every month over your whole life, so you don't have to worry about changes in the stock market. In contrast, a lump-sum payout can give you the flexibility of choosing where to invest or save your money, and when and how much to withdraw.
In most cases, the lump-sum option is clearly the way to go. The main difference between a lump-sum and a monthly payment is that with a lump-sum option, you get to have control over how your money is invested and what happens to it once you're gone. If that's the case, then the lump-sum option is your best bet.
Should I have my super in Cash? The Cash option has a very low risk level when measured over the short term. However, if you intend to stay invested in this option for a longer timeframe, you should consider whether the current low returns will be enough for your situation.
Some or all of an account-based pension can be rolled back (commuted) into accumulation phase where earnings will be taxed at 15%, then used to commence a new pension in future. You can have more than one super pension account at a time.
If you transfer more than $1.7 million, you'll generally be liable to pay 15% tax (or up to 30% tax if you've gone over before) from the day you go over the transfer balance pension cap. You'll have to take the excess money out of your pension account; your options for doing this depend on the type of account you have.
Assets test
For a couple to qualify for the full Age Pension, your combined assets must be below $419,000 if you own your own home, or $643,500 if you don't own your own home.
For example, if you are a single homeowner you can get a full pension with an asset limit of $270,500. As a couple with a home and combined assets your limit is reached at $405,000 to receive a full pension.
If you're aged 60 or over and withdraw a lump sum: You don't pay any tax when you withdraw from a taxed super fund. You may pay tax if you withdraw from an untaxed super fund, such as a public sector fund.
Do you need the income now, or do you want to wait, giving your investment a chance to grow over the long term? Income units are often used by retirees to bolster their pension payments, but if you don't need the cash now, accumulation units offer the benefit of compounding.
Gains on accumulation units/shares
Income is not distributed but is automatically reinvested within the fund. This reinvested income inflates the share/unit price but has already been subject to income tax. To avoid double taxation, the notional income can be used to increase the original cost of the investment.
Best and worst super funds in 2022
The top-performing super funds were: Unisuper - Unisuper Balanced: 1.56 per cent. Meat Industry Employees Superannuation Fund - MIESF MySuper: 1.54 per cent. Goldman Sachs & JBWere Superannuation Fund - Goldman Sachs & JBWere Superannuation Fund MySuper Product: 1.38 per cent.
In the case of accumulation shares, the income is simply re-invested in more shares and bonds, thereby contributing to the growth in the fund holders' capital. But with income shares, it's used to finance distributions to fund holders at predetermined intervals – usually monthly, quarterly, bi-annually or annually.
Key points. Keeping money in a high-growth super fund would have offered a better return than investing in property over the past 10 years. Property returns were more likely to be competitive with super in expensive neighbourhoods. Choosing property has intangible benefits, too, such as the security of home ownership.