Q: I’m retired, with two super funds. I’ve converted one to pension phase and left the other (with $1 million in it) in accumulation, as we’re mostly living on income from my wife’s super. I’ve been told I should move the $1 million to an account-based pension where there is zero tax on earnings. But I’d have to withdraw 5 per cent a year ($50,000) and couldn’t put that back into super as my total super balance is more than $2.1 million. Let’s say average earnings were 8 per cent ($80,000); tax at 15 per cent would be $12,000. Surely, it’s better for my super to be “eroded” by $12,000 a year rather than $50,000? – Raul
A: The reason many people don’t move their super into the tax-effective retirement phase is that they’re unaware they can do it, or they don’t need the extra income from a super pension, says Colin Lewis, head of strategic advice at Fitzpatricks Advice Partners.
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