February 15, 2021

Luke on 2CC – Retiring with an account-based pension

21 minutes

How do you turn your super into income when you retire?

Financial Planner Luke Smith joined 2CC Talking Canberra 1206AM in The Money Show which aired on Friday 12 February 2021. This week’s topic: What is an account-based pension and how does it work? But before they start talking financial matters, Luke is more than just a little excited, he’s just taken his first ride in a helicopter and arrived at 2CC in the field next to the car park. You’ll hear in his voice how much he loved it.

In recent weeks Luke has looked at growing your super. Last week he spoke about transitioning to retirement from full time work. This week Luke explores the account-based pension. Many Australian’s use this investment vehicle to turn their superannuation savings into a retirement income stream.

Key highlights include:

You’re retiring from the workforce and you want to turn your super into pension payments to help fund your retirement

Underlying investments don’t need to change – despite what some people might think

Pension payments can be taken fortnightly, monthly, quarterly or even less often, depending on what your provider offers

Earnings on account-based pensions are tax free. And if you held shares or other investments in the fund, you don’t pay capital gains tax when you sell them in this pension phase.

The transfer balance cap however does apply if you have more than $1.6 million in your pension fund.

So what is the transfer balance cap and how is this tax calculated?

Why is the transfer balanced cap indexed?

Once you start a pension, can you add more contributions to super?

What are the Centrelink implications of an account-based pension?

It’s possible to have an account-based pension and a Centrelink pension, depending on your circumstances

Explore the other benefits too – discounts on electricity, licensee fees and pharmaceuticals, they all add up

Some strategies to think about while considering your own plan for retirement

A free appointment offer to talk about your own financial planning goals. Everyone has different goals and financial planning advice can help you achieve them more effectively, especially when you link different strategies.

Listen to the Podcast right now

https://www.envisionfinancial.com.au/wp-content/uploads/2021/02/The-Strategy-Stacker-Luke-Talks-Money-12022021.mp3

Also available on Apple Podcasts and Spotify ‘The Strategy Stacker – Luke Talks Money’

Do you need advice to set up a retirement plan?

Can an account-based pension help you fund your life in retirement? Seek advice if you need help to make a retirement plan.

Luke as a Financial Planner can help you set up a financial planning strategy to help you achieve your personal financial goals. Retirement planning can be complicated, but the good news is you can make an appointment to speak with Luke about your superannuation and retirement strategy – including the account-based pension.

Envision 2CC offer: Your first appointment is at our cost. Make an appointment to confidentially discuss your own investment, super or retirement goals. Call Envision Financial Services on 6260 4749. You can also use our contact us form to make an appointment for a confidential discussion about your situation.

Luke will return to talk about financial planning on 2CC next Friday. You can also catch up with The Strategy Stacker – Luke Talks Money podcast. We look forward to your company again.

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By Luke Smith