When is it time to ditch your superannuation pension?

Superannuation Pensions - Blueprint Wealth Perth

We all know about the great tax benefits of Superannuation Pensions (Account based pensions started from superannuation funds). However, there are times when the benefits become insignificant or costly. There comes a time when you should move your funds out of super.

The great attraction of superannuation is that it is a very tax effective way to hold your investments. You can receive preferential tax treatment on contributions into super and of investment income of your funds in super. When you start a pension, you can also generate tax free returns and income.

However, investing superannuation has its costs:

  • Your estate can be caught with a 15% tax bill on death.
  • In pension phase you have to take a pension whether you need it or not.
  • If you chose to not take a pension your investments will be taxed at a flat rate of tax.

An alternative is to take your funds out of super and use superannuation style investments outside
super. The advantages are:

  • Depending on your income you could still remain tax free.
  • You eliminate the tax on death scenario.
  • You can bequeath the investments to your children without infringing the gifting rules.
  • You don’t have to draw down a regular income.

You should review your use of super if:

  • You are currently receiving the full or part age pension or
  • You have little income outside you superannuation pension and the age pension or
  • You wish to avoid pay death benefit tax or
  • You don’t need the income from the superannuation pension or
  • You have been diagnosed with a terminal illness.

Moving your money outside of super needs serious consideration and I urge you seek professional advice before you take this step. There are number of things that need to be considered before you take that step:

  • Are you happy with completing tax returns each year?
  • Do you expect to receive any lump sums in the future?
  • What happens if you lose your spouse?
  • Do you intend to downsize?

For help and advice with your superannuation planning, please contact our friendly team today.


Blueprint Planning Pty Ltd (ABN 78 097 264 554, trading as Blueprint Wealth is an authorised representative and credit representative of AMP Financial Planning Australian Financial Services Licensee and Australian Credit Licensee

This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.

If you decide to purchase or vary a financial product, your financial adviser, AMP Financial Planning and other companies within the AMP Group may receive fees and other benefits. The fees will be a dollar amount and/or a percentage of either the premium you pay or the value of your investment. Please contact us if you want more information.