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.
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.
When your superannuation is in accumulation phase, you are not required to make any withdrawals from your account, even if you are retired. However, once you use some or all of your accumulation balance to start an account based pension, you must withdraw a minimum level of pension income each year.
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.
Taking some of your super as a lump sum could give you access to money for planned activities. For example, paying for a holiday or medical expenses. You could keep the rest in a retirement income stream, to give you a regular payment you can rely on. Income stream options include an account-based pension or annuity.
Making personal concessional (deductible) contributions to superannuation can effectively reduce capital gains tax within your individual name, because you receive a personal tax deduction for making personal concessional contributions to super, which reduces your assessable income and can also reduce your marginal tax ...
Where you decide to retain your benefits in super accumulation phase and not draw a pension, the earnings on the fund assets will generally be treated as assessable income and be taxed at 15%. (The tax rate in pension phase is 0%). So, let your super accumulate away…for another 12 months or however long suits you.
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.
With accumulation units income is retained within the fund and reinvested, increasing the price of the units. Generally, for investors who wish to reinvest income, accumulation units offer a more convenient and cost-effective way of doing so.
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.
Just like your personal savings and investments, your super affects your Age Pension because Centrelink uses an assets test and an income test.
This is the money you've been saving for your entire working life, so once you hit 65 (or 60 if you're retired), yes, you can use your super to pay off your mortgage.
If you are over 60 and are withdrawing an amount from an accumulation account the amount will be tax free if you meet a condition of release. You won't be able to withdraw the amount if you don't meet a condition of release. Turning 65 is a condition of release, whether or not you are still working.
Make the minimum payments
When running an account-based pension, one of the key requirements is to ensure you draw at least the minimum payment amount each financial year. This is an important criteria in maintaining the tax-free status of your fund's earnings in pension phase.
Minimum drawdown rule
There is no maximum. This is done to ensure you don't keep too much wealth in the tax-free pension phase. Remember, you don't have to choose between an accumulation account and your pension account. You can actually do both if you choose.
Accumulation phase refers to the period in a person's life in which they are saving for retirement. The accumulation happens ahead of the distribution phase when they are retired and spending the money.
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.
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.
The over-55 home sale exemption was a tax law that provided homeowners over age 55 with a one-time capital gains exclusion. Individuals who met the requirements could exclude up to $125,000 of capital gains on the sale of their personal residences. The over-55 home sale exemption has not been in effect since 1997.
Small business 15-year exemption
You won't have an assessable capital gain when you sell a business asset if: your business has owned the asset for at least 15 continuous years. you're aged 55 years or over. you're retiring or permanently incapacitated.
Capital gains aren't taxed until you begin withdrawing funds in retirement, at which time you may be in a lower tax bracket than you are now.