Retiring from the workforce brings with it a number of significant decisions that need to be made, not least of which is what to do with your superannuation. You could:
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Leave it where it is and do nothing for a while |
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Withdraw some or all of it as a lump sum of money |
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Turn all or part of it into an account based pensions |
Recent legislative changes means that the maximum sum of money that a retiree can transfer to an account based pension is $1.6 million, as of 1 July 2017. Also, for pre-retirees using transition to retirement strategies, it’s worth noting that from 1 July 2017, the fund earnings of transition to retirement pensions will be taxed up to 15 percent, as opposed to not being taxed at all.
How will an account based pension affect my age pension
If you are eligible for an age pension when you retire, then you will need to discuss with the Department of Human Service just how an account based pension could affect this entitlement. You can speak to a Financial Information Service (FIS) officer from the Department of Human Services for free, who can help you understand how an allocated pension might relate to your situation. Call 132 300 to speak to an FIS officer.
A comprehensive answer for everyone is not possible as each person’s situation is different, but as a general rule, income that you withdraw may be included under the Age Pension Income Test and a lump sum that you withdraw might be counted under the Age Pension Asset Test.
How does the Age Pension work? Here’s a quick summary https://t.co/Lkqw0vtPN0 pic.twitter.com/5kZUpRn5Oi
— CANSTAR (@CANSTAR) December 5, 2016
Please note that on 1 January 2017, there will be changes to the assets test used to calculate pensions.
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