Accumulation Phase Versus Pension Phase
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- Опубликовано: 15 сен 2018
- Accumulation phase versus pension phase; includes pension phase minimum drawdown, super pension phase tax rates and rolling back pension to accumulation and SMSF pension phase and accumulation phase
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This was exactly the information I've been looking for, clearly explained and valuable! Thanks.
Thank you for taking the time to comment. I’m glad to hear you found it valuable!
Great, clearly explained 👍
Great video! Great work! Congrats!
Thanks Oscar. Really appreciate you taking time to provide feedback.
This is the clearest and most concise explanation of the Super Accumulation/Pension/TTR phases I have read. Congratulations to you in your effort in explaining a very complex financial area. I currently hold an Accumulation and TTR account and will be turning 60 in a few months. As I will be retiring from all work then I am assuming I will be required to move all monies from the Accum & TTR accounts to a new Pension account where all earnings will be tax free. Please correct me if I'm wrong. Thanks again.
Hi Sam, thank you very much for your comments, it means a lot. Upon permanent retirement, you are not necessarily required to move all monies from Accumulation and TTR to an Account-based pension. You have many options......You can continue to have a TTR pension and Accumulation, or you can have all your money in Accumulation, or you can have some in Accumulation and some in an Account-based pension, or you can have all in an Account based pension - or you could even pull it out of super altogether! However, the benefit of an account based pension is that it is a retirement income stream that provides you flexibility to choose your income amount, subject to a minimum payment factor. Also, as you mention, all earnings from investments within an Account-based pension are received completely tax-free, which is not the case with an Accumulation or TTR account. The main consideration of an Account-based pension is that it doesn't guarantee you an income for the remainder of your life. The longevity of an Account-based pension is based on earnings within the account and the level of income drawdowns. Once the account balance reaches $0, you will receive no further income payments (same as a TTR pension). If you do decide to use your Accumulation and TTR balance to start an Account-based pension, you should contact your current (or intended) super provider for details on the process involved.
How to compare franking credit credits with pension like how it is used to estimate pension
Very wonderful video man
Manish Kashyap thanks Manish. I appreciate you taking the time to comment
Do you pay a 15% tax on superannuation earnings on a accumulation fund when fully retired instead of going into a pension phase,thanks.
Thanks for this Super Guy! Are the funds held in your accumulation super account transferred to your retirement account without incurring a capital gains event?
Not always. This will depend on the rules and processes of your superannuation provider.
Clearly explained - thank you!. However, assuming you have reached your preservation age, is the tax you mention ( i.e 15%) also applicable on a Defined Benefit Scheme when moving it out of the accumulation phase to a lump sum withdrawal??
A defined benefit scheme is different from an accumulation account, but some DB schemes require the final balance to be rolled over to an accumulation account or income stream upon retirement. Alternatively, you can often opt for a lump sum payment. The tax on the lump sum withdrawal will be determined by the components of the defined benefit scheme and whether it comes from a taxed or untaxed source. I would strongly suggest obtaining personal financial advice in relation to this and discussing it with a tax accountant prior to making any decisions.
@@SuperGuyAu Thanks - much appreciated!
Hi Super Guy - Loved the video - clear and concise - it would be great if you could develop some more to assist folk
Myself and a work colleague are both on leave running down our leave entitlements before retiring
Where can I find some clear understanding of what the actual mechanics and time frames are on retirement?
I've been told that on retiring from my (our) employer, the super company converts the accumulation account (AA) to a retained benefit account (RBA) until you give them instruction, as to what to do with your monies Is the automation of a AA > RBA required by law? What time frames are involved here as to when these steps "must" occur? and what are the benefits of retaining a AA (small $ amount) together with an allocated pension account (APA) with the majority of your funds, in retirement? I hope I have been clear enough
ANy assistance and direction would be appreciated - Thank You Super Guy!
G'day Fred, thanks for your comments. I would suggest watching our free superannuation workshop, which should answer many of your questions. You can get access to the workshop here www.superguy.com.au/ and remember to click the suscribe button abovel for future videos.
great
Thanks Kim!
Love your presentations. If you are retire, transfer your funds to a retirement phase. Then change your mind and return to part time or full time work. Will your funds in the retirement phase fund stay there, not paying 15% tax on the income or do they have to be moved to a accumulation phase account?
Once you initially meet a definition of retirement, your balance at that date become unpreserved, meaning you have full access to them indefinitely and, yes, they can remain in pension phase.
Easy to understand thankyou !
So if you have reached your retirement age ( 65 ) can and should you move most of your money into TTR / Account based pension if you wish to reduce the tax payable ? How many times can you move $ from Accumulation to TTR/ Account based pension account and is the timing important? ( Taking into account all provisions and cap rules are abided by )
You're welcome, Jan! Commencing an account based pension ensures all investment earnings within the account are received tax free. However, unlike an accumulation account, you are also required to take pension payments. You can generally move fully or partially between accumulation and pension accounts as often as you like. You should seek personal advice about the appropriateness of converting to pension phase and timing of it, based on your needs. We can assist if you like www.torowealth.com.au/
Good work. This subject really need diagrams for clarity. If my super is approaching $1.7M can I start a pension phase to draw down a small amount and keep within the limit cap. Can I repeat the cycle to keep the super cap in balance?
A pension can be commenced using up to $1.7M if you have met a full superannuation condition of release. $1.7M is the max that can be transferred. Even if the balance falls below $1.7M, no more can be transferred into the pension, because the cap is based on a 'proportion-used' approach. Conversely, if your pension balance grows above $1.7M, you do not need to draw out the excess - provided the pension did not originally commence with more than $1.7M Read more here www.ato.gov.au/individuals/super/withdrawing-and-using-your-super/transfer-balance-cap/
Can the 4% you are required to draw down from the pension phase fund be put back into the accumulation phase fund when under 75yo and working part time or full time as either a concessional (meeting the work test) or non-concessional contribution if the concessional cap is reached?
Yes, the source of funds for contributions to super is up to you.
Hi Chris this video has answered a question I asked you in a later one so thanks for that. I wanted to ask how you calculate the 4% over 60 drawdown. I have my SMSF invested in the Nasdaq 100 through an ETF. If the index rises 10% in one year and my balance mirrors this does this mean I have to withdraw 14% in order to be 4% lower overall?.
The 4% minimum pension drawdown is based on your pension balance on 1 July of each year. If your pension balance is $500,000 this 1 July the minimum pension is $20,000 (4%). If your balance is $550,000 on the next 1 July the minimum pension is $22,000 (4%).
@@SuperGuyAu Thanks for your time Chris. So the drawdown is calculated on the starting balance each year not the balance at the end of the year?.
If you reach preservation age but still leave the fund in accum super, do you still have to pay 15% tax on income? Or must transfer to pension super?
Hi Rocky, yes, while your super is in accumulation phase, earnings tax of 15% is payable. It is not until you transfer your super to an account based pension that earnings become tax free. This is regardless of age.
If you can transfer money back from Pension to Accumulation, and given you have obviously previously met a retirement definition - Does that mean that you can make the declaration of being retired and simply let the fund "sit untouched" for as long as you want in the accumlation account? In other words, you don't need to do a lump sum, or a pension, and just let the funds instead grow with earnings in the accumlation account, without having to pay the ATO 15% tax on the earnings anymore? So it just keeps growing without you accessing it in any capacity, after you have met the retirement definition, tax free?
There is no requirement to start an income stream once you have met the retirement definition. However, leaving your funds in an accumulation account will mean you are still incurring earnings tax of up to 15%, regardless of whether you have met a retirement definition or not.
Very good video and easy to understand.
Does pension account still produce earning?
Can we choose the way the pension account is invested in (just like in the Accumulation account), eg balanced, high growth, etc?
Thank you Herman. Yes, just like an accumulation account, a pension account remains invested and still produces earnings. You generally have the same investment options available, balanced, high growth, etc.
Hi SuperGuy, if both accounts are similar this mean that the pension account is intended to draw down to 0? .@@SuperGuyAu
What if you put more then 24000 salary sacrifice in a financial year do you pay a penalty ?
The concessional contribution cap for the current year is $27,500. If your combined SG contributions and salary sacrifice contributions exceed $27,500, the ATO will notify you and the excess will be assessed at your individual tax rate and you will have the option to withdraw the net excess from super. It's not a penalty, it's simply just putting things back the way they would have been had you not exceeded the cap.
@@SuperGuyAu thank you I was told that if the previous financial year you didn’t reach your cap you can claim that in the present year ?
@@liferesetthailand Each year, since 2018/19, your unused concessional cap is carried forward for 5 years on a rolling basis. And yes, you can utilise some or all of your unused portion in a given year, provided your super balance was below $500k on 30 June of the previous financial year. Read about it here www.superguy.com.au/superannuation/how-much-can-i-salary-sacrifice-into-super/
@@SuperGuyAu cheers l great channel