RETIREES KERRIN FALCONER
NOT all retirees will have superannuation investments because the compulsory super guarantee was only introduced in 1992. Since then, the rules of super have changed as many times as retirees have had hot dinners.
At the moment there is a bit of a hiatus in regard to any significant changes. But don’t bet your bottom dollar on that remaining the case forever. For retirees with super, here’s a recap of some of the most important things:
Superannuation is a tax structure. As such, super is taxed differently from non-super investments. In the accumulation phase, earnings are taxed at 15 per cent and capital gains at an effective rate of 10 per cent. In the pension phase, and this will be where most retirees are, there is no tax on earnings, capital gain or lump sum withdrawals.
Superannuation investments. Firstly, you can invest in all the same investments as non-super, such as term deposits, cash, shares and property. Secondly: will your super last a lifetime or will the capital be run down?
Superannuation does not automatically form part of your estate. If you wish to direct your superannuation benefits to a specific person/s, super funds require a binding nomination to be in place. If you do not have a binding nomination, the trustees of the fund will direct your benefits to where they think is most appropriate. There are also tax rules around lump sum death benefits to nondependants. Tax of 15 per cent can be levied. Kerrin Falconer is a finance writer and has worked in the financial services industry for 18 years