Super and planning for retirement

Check your super

When you start to plan for retirement, you’ll need to check your super:

• where it is
• how much you have
• whether you have lost or unclaimed super
• consider consolidating accounts where relevant
• that your details are up-to-date with the ATO and your super funds.
• You can do this in 5 simple steps with the ATO’s super health check. For most people it only takes a few minutes.

It’s important to know your total super balanceand contributions caps, especially if you plan to contribute to your super. When you check your total super balance, take a note of your concessional and non-concessional contributions. These will indicate if you can make extra contributions or are approaching your limit.

Estimate how much income you will need to retire

The Australian Securities and Investment Commission’s (ASIC) Moneysmart website has information and tools to help you prepare to retire. You can use their:

• Super and pension age calculator to work out when you can access your super and the age pension
• Budget planner to work out your living costs
• Retirement planner to estimate your income from super and the age pension.

Your superfund may also offer a range of calculators to help you. You can access information to help you understand your finances at a free Financial Information Service (FIS) webinar run by Services Australia. You can book to attend a live webinar or watch recordings on their website.

How can I increase my super?

You can increase your super by making extra contributions. Before deciding whether to contribute extra, remember to consider your total super balance and contribution caps. Exceeding the caps may lead to extra tax.

If you decide to contribute extra to your super, the Moneysmart super contributions optimiser will help you work out which type of contribution will give your super the biggest boost.

The following contribution types may be available as options to increase your super (separate eligibility conditions apply):

• concessional and non-concessional contributions
• carry forward unused contribution cap amounts
• downsizer super contribution for people over 55 who have sold their primary residence
• government co-contributions to match your extra personal contributions (up to $500)
• a low income super tax offset (LISTO) payment (up to $500)
• spouse contributions
• capital gains tax retirement exemption contribution for people under 55 if you are selling a small business.

If you are employed, it’s important to remember that your employer’s contributions will count towards your concessional contributions cap.

You may have more than one super account. Consider consolidating your super which means combining super into one account to help save on fees.

Visit ASIC’s Moneysmart to learn more about how to grow your super.

You can also talk to us about the investment options available to help you grow your super.

Considering an SMSF to grow your super?

If you’re thinking about a self-managed super fund (SMSF) to grow your super, visit Moneysmart to learn more about what is required and to understand if an SMSF is right for you.

Accessing your super to retire

When you reach your preservation age and retire, you can access your super to fund your retirement.

You can also access your super:

• when you turn 65 years old
• if you are aged 60 to 64 years of age, under the transition to retirement rules, while you continue to work.

For more information, see Accessing your super to retire.

You can access your super as a lump sum, income stream or a combination of both. Visit Moneysmart to learn more about your retirement income.

After you retire, you may decide to return to work, and you may be able to contribute to your super again. However, it’s essential to consider how this might affect your income, including Australian Government payments (such as the age pension) and your superannuation.

You can discuss your options:

• by using the Financial Information Service – Services Australia
• with your super fund
• by contacting us to understand any potential impacts.

Each fund has governing rules. It’s essential that you talk to your super fund, or talk to us about how you can access your super in retirement and what options are available to you. If you’re a member of an SMSF, understand how you can be paid your benefits.

Tax on super benefits

The tax on super benefits depends on factors like your age, payment amount, and whether your super is taxed or untaxed. If you are 60 years old or older, your super payments may be tax free. For personalised advice, speak to us.

If you’re considering an income stream, check your transfer balance cap (TBC). Exceeding your TBC may lead to extra tax. TBC also applies to a death benefit income stream.

For more information, see Tax on super benefits.

After you retire, even if you don’t need to lodge a tax return it’s important that:

• your contact details with the ATO and your super funds are kept up-to-date
• you regularly review your super on ATO Online
• you check to see if you have any lost or unclaimed super.

Consider seeking professional advice

This information is not financial advice. We can help you make informed decisions about your super and retirement options.

Source: ato.gov.au September 2024
Reproduced with the permission of the Australian Tax Office. This article was originally published on https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/super-and-planning-for-retirement
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