Question: I’m 66 and recently retired and am currently living off savings and a small income. I have superannuation under the $1.7 million pension cap. What are the pros and cons of moving my super to pension phase? If I do so, I know I must withdraw a certain amount each year.
For someone who is 66 as you are, the current minimum withdrawal if you were to start a pension before July 1 is 2.5 per cent for the proportion of the current 2022-23 financial year that remains, multiplied by the super you transfer into a pension. For someone who has retired, it’s an entitlement that can be available for the next nine years until you turn 75, under a change to the superannuation contribution rules from this year that allows contributions of after-tax amounts without a work test.
And if you change your mind about recontributing the surplus super, you can always withdraw this given your age, she says.