Superannuation Discussion + market volatility

[Pushka]

So I'm assuming it's because the funds are still in accumulation phase, so also paying tax, but why is it at a certain age I can withdraw a lump sum tax free, with no limits (other than my own common sense ) yet once the fund is in pension phase there are restrictions on how little and how much I can withdraw as pension?

 

[cove]

We have to take 5% out of our SMSF in this new year as a pension based on our age.

 

[tgh]

have to take 5%

Wealthy young whippersnapper.. ours is now 6%

 

[cove]

I saw that it goes up to 14% annual pension for seriously senior folks.

 

[Pushka]

We have to take 5% out of our SMSF in this new year as a pension based on our age.

I didn't realise that was even indexed for age! Sheesh. We haven't converted any yet as it's still earning. And under 70.

 

[tgh]

yet once the fund is in pension phase there are restrictions on how little and how much I can withdraw as pension
I assume this refers to a big fund as a SMSF can take from the minimum up to the balance..whenever

We haven't converted any yet as it's still earning
Forgive an old man but I don't understand.. you are saying in pension phase your fund will cease to earn anything ???

 

[Buzzard]

So I'm assuming it's because the funds are still in accumulation phase, so also paying tax, but why is it at a certain age I can withdraw a lump sum tax free, with no limits (other than my own common sense ) yet once the fund is in pension phase there are restrictions on how little and how much I can withdraw as pension?

Once in pension phase, I'm pretty sure you can withdraw as much as you like.
I pulled out over half a million from mine a couple of years ago.

 

[Pushka]

Once in pension phase, I'm pretty sure you can withdraw as much as you like.
I pulled out over half a million from mine a couple of years ago.

I'm not in pension phase with the super fund - still accumulation - but can withdraw from it if there are the correct funds in play. Which there are. And I'm old enough.

 

[CaptJCool]

these are minimum drawdowns - there is no maximum cap except for one obscure example of transition to retirement

Key superannuation rates and thresholds

Rates and thresholds apply to contributions, employment termination payments, super guarantee and co-contributions.

www.ato.gov.au

you can drawdown as much as you like as long as its above the minimum

 

[Matt_01]

Never thought I would be asking this question on a frequent flyer site but is there any recommendations for a Financial Planner (retirement) in ADL or someone that travels around and knows the rules and laws. Not interested in anyone that is just willing to recommend funds which they receive a trailing commission from. I am after a full disclosure service and happy to make my own decisions based on what information is presented and will ask questions.

 

[serfty]

Simple question - or not !?

Can a person of 65+ years age still working access part of their superannuation as a lump sum.

 

[Pushka]

Simple question - or not !?

Can a person of 65+ years age still working access part of their superannuation as a lump sum.

Yes.

Withdrawing your super and paying tax

Information for individuals about withdrawing and paying tax on their superannuation.

www.ato.gov.au

You can access your super when you:

• reach your preservation age and retire
• reach your preservation age and choose to begin a transition to retirement income stream while you are still working
• are 65 years old (even if you have not retired).

If you meet a condition of release with zero cashing restrictions, the preserved and restricted non-preserved benefits in your account will become unrestricted non-preserved benefits.

All my funds are now unrestricted non-preserved benefits. We are both still working.

Your super fund may have other requirements. HESTA is fine. Application made completely online. A very small lump sum withdrawal is what we have done.

 

[CaptJCool]

Simple question - or not !?

Can a person of 65+ years age still working access part of their superannuation as a lump sum.

yes

turning the age 65 opens the door to unrestricted access


and here's a handy ready reference

Superannuation Retirement Rules That You Need To Know

Get a complete run-down of the most common superannuation retirement rules, as well as answers to some common questions.

superguy.com.au

 

[cove]

Many view their employer paid superannuation as a source of funding for their home mortgage or a 4wd plus a caravan. This of course is a problem for the Federal Government who would like retirees to fend for themseles.

 

[Pushka]

yes

turning the age 65 opens the door to unrestricted access


and here's a handy ready reference

Superannuation Retirement Rules That You Need To Know

Get a complete run-down of the most common superannuation retirement rules, as well as answers to some common questions.

superguy.com.au

That's probably one of the simplest but very detailed articles I've read. Thanks.

 

[serfty]

Many view their employer paid superannuation as a source of funding for their home mortgage or a 4wd plus a caravan. This of course is a problem for the Federal Government who would like retirees to fend for themseles.

A family member is turning 65 later this year and has the yoke of a high 5 figure bank overdraft hanging around their neck, last year it was 6 figures. How they got there is another story.

While they can claim the interest and fees against their business, the former has gradually increased from 9% to 14% over the last 18 months. The fees are 2% of the limit per annum which they have reduced.

Their super balance is an order of magnitude higher than the debt.

When I suggested using part of that balance to eliminate the $12k in annual costs, they looked at me like I had two heads and did not believe they could do that in a couple of months at no charge.

 

[Pushka]

A family member is turning 65 later this year and has the yoke of a high 5 figure bank overdraft hanging around their neck, last year it was 6 figures. How they got there is another story.

While they can claim the interest and fees against their business, the former has gradually increased from 9% to 14% over the last year or so. The fees are 2% of the limit per annum which they have reduced.

Their super balance is an order of magnitude higher than the debt.

When I suggested using part of that balance to eliminate the $10k in annual costs, they looked at me like I had two heads and did not believe they could do that in a couple of months at no charge.

I quite understand their disbelief. I still have to check - can I really do this! The Super fund HESTA, is of course on top of it all. And I reckon it's a 'loophole' that may well disappear at some stage. The article posted by CaptJCool is worth a read.

 

[SydneySwan]

I would not describe being able to withdraw your super once you reach 65 as a loophole. If you have debts to pay it makes perfect sense, especially from a mental-health perspective.

I have a friend who reached 65 last year with c.180k left on his mortgage which he was very worried about. He had about 500k in super. I suggested that he pay it off from his super and after some procrastination he did. His wife told me that he is like a new man now, unburdened by the mortgage.

 

[Buzzard]

Many view their employer paid superannuation as a source of funding for their home mortgage or a 4wd plus a caravan. This of course is a problem for the Federal Government who would like retirees to fend for themseles.

Not that I have one or even want one, however if you have worked hard for the last 40 or 50 years maybe you deserve that brand new 4wd and van. Travelling the country might be your dream for those twilight years.

 

[Pushka]

I would not describe being able to withdraw your super once you reach 65 as a loophole. If you have debts to pay it makes perfect sense, especially from a mental-health perspective.

I have a friend who reached 65 last year with c.180k left on his mortgage which he was very worried about. He had about 500k in super. I suggested that he pay it off from his super and after some procrastination he did. His wife told me that he is like a new man now, unburdened by the mortgage.

Nor do I at all but the Feds must look at all the super funds lying around and somehow they want to play with it. Or at least stop us from playing with it.

Post automatically merged: Jul 2, 2023

Not that I have one or even want one, however if you have worked hard for the last 40 or 50 years maybe you deserve that brand new 4wd and van. Travelling the country might be your dream for those twilight years.

Agree. Every persons retirement plans differs. I just don't trust the Government (any flavour) to let it be as is.