Accumulation and Pension Phase of superannuation

I have been receiving many questions regarding the topic of superannuation, so today, let’s understand superannuation as a product and a difference between the accumulation and a pension phase of the superannuation cycle, and which one is better and why.
Accumulation phase
This is the stage when all the money is being collected via different types of contributions:
1. Employer SCG, which currently is 10.5% of your gross wage, increasing by 0.5% annually to 12% by 2025.
2. Salary sacrifice
3. Personal concessional contributions when you claim tax deduction or
4. Personal non-concessional contributions, when you contribute the after tax money to your super account.
Pension phase
After the whole life of work and savings, there is a time when you want to retire, either fully or partially, and you need to commence an income stream, and start drawing some income from your super savings.
This is when you start the pension phase.
You can transfer your super to a pension in full or just part of your super balance. You are not forced to close down your super account, just because you need some income from your savings.
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[@AboutRetirementTV]

Which phase is your superannuation in right now?

[@alansmith2281]

Hi Katherine i put my super in cash investment the start of the Ukraine war as I was loosing money . I reached retirement age in January 2020 I stop working but not claiming any pension or benefits?wife is not working and is 3 years from retirement age we are both now living of our savings? I like to know will I be taxed for leaving my super to accumulate some money as I dont need to withdraw it anytime soon?

[@tanngo7900]

Hi Catherine. After watched this video. I am now concerned about Capital gains tax , I have an investment property , I am planning to sale in the next 2 years . At that time I will be 64 years old . Should I wait for 1 more year to avoid CGT in this case?

[@AboutRetirementTV]

Hi Tan, just organise a meeting with me beginning of the next year and I can do assessment of your tax position then, to help you decide when to sell the property to maximise your benefit and minimise CGT.

[@tanngo7900]

@@AboutRetirementTV what do I have to prepare before the meeting with you. And what is the cost?

[@himanshigautam7351]

Hi everyone, I want to learn SMSF basics. Can anyone one suggest from where I can get full knowledge like books or any course? Thank you Katherine it was a wonderful explanation 😊 I like all your videos.

[@AboutRetirementTV]

SMASF is on my to discuss list 😀

[@devraga9612]

There is a lot of talk about when you change from accumulation phase to pension phase - there is CGT payable?

[@SpookFilthy]

On your super investments there is not (like you if you have a SMSF which incorporates property) but this video is misleading imo. You'll pay CGT on assets sold outside your super (if the gain minus CGT discount put you into income tax territory).

[@chollypaderanga307]

Hi Katherine, my husband and I would have liked to contribute extra under concessional contribution. However, we are holding back due to shares now are all diving down. We are both working full time. However, my husband will retire in 2 years from now. Please advise if it’s still a smart move to go ahead with the concessional contribution to superannuation now? Your personal thoughts and opinions are sought here, please advise. Thank you 🙏 in advance, Katherine

[@AboutRetirementTV]

Hi Cholly, investing extra to super is always a good idea, and if you can do it as a salary sacrifice that provides you with tax benefits, that is even better. I understand that you are concern about the market volatility, I cannot legally advice on products or investments in this forum, as I would need to assess your personal risk profile before advising, and that can only be done on the basis of a personal advice, meaning consultation. But if you are really concern about the market, you can still contribute funds, just keep them in cash within super until such time that you feel comfortable entering investments, alternatively choose some conservative option, or just simply book a meeting with me if you wish to dig deeper into this subject,

[@petertaggart2231]

Best time to buy into the market is when it’s low. Hopefully You’re buying good stock at a low price. Imagine where that stock will be when the market bounces back.

[@aussietaipan8700]

My super accumulation inputs are Employer SCG, SS and PNC. I just wish Putin was in front of me personally so this #%* war can stop, and super funds can recover. I have taken steps to take control of my other funds using the share market. My aim is to make each worth the same. So far so good. 147 liked, there should be many more.

[@AboutRetirementTV]

I think you are doing well, and yes we all wish that about Putin. World suffered enough. thank you for your support 😀

[@user-hj8zs8yn5s]

Hi ,I applied for the old age in August 2023 and still waiting for an answer,I applied on mygov and responded to all there questions,my 3 questions are,how can I speed up for an answer,SMSF in a pension phase is this counted in the access test,downsizing from family home sale can this fund be in my spouse super who will not be eligible for pension for 2. 5Years ,

[@Robyn19fnq]

Thanks again Katherine for an informative video. That's a lot of information! I'm now concerned about CGT, as I didn't think of that when I recently sold an investment property. Even though the sale price was significantly lower than the purchase price 10 years ago, is CGT applicable? (I am now receiving age pension payments.)

[@AboutRetirementTV]

Hi Robyn, if your sale price was lower that the original purchase price of the property, you have a capital loss and not gain, therefore there are no tax consequence's to pay

[@user-hj8zs8yn5s]

Hi Katherine,I applied for the old age in August 2023 and still waiting for an answer,I applied on mygov and responded to all there questions,my 3 questions are,how can I speed up for an answer,SMSF in a pension phase is this counted in the access test,downsizing from family home sale can this fund be in my spouse super who will not be eligible for pension for 2. 5Years ,

[@katicarlton3547]

Thankyou for your videos. Am I correct that you can invest in growth within the pension phase as one would in Accumulation phase? Also what would be the benefit of keeping some of your fund still in accumulation regardless whether you are under or over the cap? When would someone do this? Merry Christmas to all! Thankyou Thank you

[@ykps1978]

Hi Katherine, At the moment, I do a salary sacrifice in addition to the employer's SG. My assumption is neither is taxed after the preservation age. . Is that correct?

[@3505ian]

I enjoy your sessions. I never seem to fall into any category. If only you were in Brisbane I would not hesitate to see you for advice re my small superannuation account. Alas, I don't know where to turn. I suppose it would be unprofessional to ask you to suggest an adviser. I will keep watching your videos, and a big thumbs up.

[@himanshigautam7351]

Can you please make video on ECPI (segregated and unsegregated method)

[@Masa-gh2uw]

Hi Katherine, would you be able to explain the procedure and difficulty of applying the age pension with SMSF (when you have a time) please.

[@AboutRetirementTV]

that's an idea. Most certainly lots of preparation for this type of application. I will see what I can do with this subject Masa

[@rodkennedy4330]

Hi Katherine, another informative video. Is it right that at 65 or over and retired if you split your super between accumulation and pension ,you no longer pay tax on earnings in the accumulation fund,Also I asked a question re low income health care card in your previous video and hope you could help me on that to. Thank you regards Rodney

[@SpookFilthy]

Investment gains made in accumulation phase are subject to 15% regardless of retirement status. Gains made on investments in a super pension phase are not taxed but you are limited to a cap of 1.9m (as of 2024) over your lifetime. If you exceed this, you'll be hit with additional tax. Therefore your money over 1.9m should go back into accumulation phase or you can withdraw it etc. You can't move money back to pension phase if you've hit the cap (1.9m described before). If your super balance exceeds 3m, you'll get taxed on unrealised gains as well.

[@alto1955]

Great video many thanks

[@chollypaderanga307]

Thanks again for this valuable information, Katherine! Big help for us to move forward 😇 By the way, please let us know different phases of superannuation Thanks 😇

[@AboutRetirementTV]

Hi Cholly, could you please elaborate, what would you like to have explained please. This question is just too generic, so I would like to know what is the problem you would like me to discuss.

[@hgao3785]

😊