The Money Sandwich by Marc Bineham

Author:Marc Bineham [Bineham, Marc]
Language: eng
Format: epub
ISBN: 9781119910633
Publisher: Wiley
Published: 2022-08-29T00:00:00+00:00

Getting money out of super

After you reach your preservation age, it is possible to start withdrawing your accrued superannuation savings. This is the whole idea of super, after all: that you save until retirement, then use your super to maintain your standard of living beyond that point.

All funds added to your superannuation via the methods I described in the preceding sections go into what is called an ‘accumulation account’. There are two ways of moving money out of your accumulation account:

You can withdraw all or part of your funds as a lump sum and move them ‘outside super’ into, say, a bank account. From there you can invest or spend those funds in any way you like. (You would only do this if you had a clearly defined investment strategy for those funds. Simply withdrawing them and leaving them in the bank would not be a tax-effective approach.)

You can move funds from your accumulation account to a ‘pension income stream’. This is a special type of superannuation account that pays you a regular ‘tax-free’ pension. The amount and regularity of this pension is up to you, within defined limits. Currently, the requirement is that up to age 65 (where your preservation age is earlier than this) you can withdraw from 4 per cent11 of the capital of the pension account each year, in one or more payments over the year. This percentage increases from 65 onwards. If you are in transition to retirement, for instance because you wish to continue working part-time, there is a maximum cap of 10 per cent per annum that you can withdraw.

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