Tax Free Pension Accounts

Once you turn 60 and are fully retired or reach age 65 (even if you are still working), you are eligible to access a tax free pension account. You can transfer money from your existing super account and money from your personal bank accounts / investments (up to certain pension balance and contribution cap limits).

If you leave your money in super, it continues to be taxed at 15% on the earnings. This means for an account balance of $500,000 you would be paying at extra $3,000 per year * of tax that you don't need to pay!

The higher your balance, the more tax you are paying.

If you leave money and investments in your personal name, they could be taxed at up to 47% per annum!

This makes the 0% tax rate of Account Based Pensions the best possible structure to hold your wealth. Note: the Pension Transfer Balance Cap is currently $2 million per person.

It's also important to note that you can have nearly all of the same types of investments in your personal name, as you can in your account based pension, particularly via the use of a Self Managed Super Fund.

When you create an Account Based Pension, you are required to withdraw a minimum pension each year which increases with age. However, in most cases, if you don't require the income you can contribute it back into super up until age 75.

We have helped many clients retire successfully for more than 10 years. To find out more, visit our Retirement Planning hub or book in your free call below:

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*Based on an estimated income yield of 4% per annum x 15% tax rate of super.

General advice only. Please reach out to discuss your options and to receive personal advice.