Hi all
Just want to make few calculations and hope somebody can put me on the right track.

From what I read appears to me the during pension age there is compulsory draw from super between 5% and 15% pa and if it is below $2522 per fortnight, there might be top up from Centerlink in a form of Pension?

Suppose there is $200,000 in super.

Minimum draw of 5% equals to $10,000 pa
Almost $385 pf
After deduction of allowable $264 income per fortnight leaves $121 excess.
Now for every dollar of too much income 50 cents is deducted from Pension, making it $60.50

If pension (for couple) is $1099 per fortnight minus $60.50 = $1038.50

So in total per fortnight there is :

Pension $1038.50 + Super $385 = about $1423.5 per fortnight



Should I decide to draw 15% (I understand maximum allowable) = $30,000
Almost $1154 per fortnight
After deduction of allowable $264 income per fortnight leaves $890 excess.
Now for every dollar of too much income 50 cents is deducted from Pension, making it $445

Pension (for couple) is $1099 per fortnight minus $445 = $654

So in total per fortnight there is :

Pension $654+ Super $1154 = about $1808 per fortnight

Are any of my calculations remotely correct?



Other questions:
After 5% or 15% was drawn, are new 5% and 15% calculated each year?

And heard that Super component must be drawn on Life Expectancy Year, is it true or one can hope to live to 100 and divide money accordingly?

Looks I ask too much.

Does anybody know good up to date book that touches on this issue, so I can get good understanding of how it works?

Or Australian Internet site that covers Super and Pension issues?

Hi G,

Possibly this particular site could be of assistance to you. I cannot verify for the correctness or otherwise of the information it contains - and I don't have an SMSF sorry.

http://www.thesmsfreview.com.au/index.html

G

not knowing anything about your set up, or age (nor do I want to know), I will comment along these lines:

very generally, depending on your SMSF, each member of the Fund could have one (1) or plural Account Based Pensions, and possibly an Accumulation account for each. hence there may be multiple Account Based Pensions (or even Defined Benefit Pensions if you were lucky enough to access this before they were closed off in 2004 / Lifetime Complying Assets-Test Exempt pensions in 2006)

each Account based pension should specify in $ amounts the Preserved, Restricted and Unrestricted components.
each Account based pension should have a tax breakdown beween Tax Free and Taxable element. (*only relevant if under 60 or benefits to be paid to non-dependent). The tax free percentage for pension accounts is calculated upon commencement and is used to ascertain the tax free amount of any pension payments or commutations, if applicable.

from those numbers, Minimum (and Maximums, if applicable) pension Payments can be paid

if you are taking over the minimum, there are advantages to drawing down from either Tax free or Taxable form the combinations of Pensions, depending on * above.

************************
I find the best outcome is to seek advice from someone who understands this (hard in itself). The saving outweighs the cost.

Thank you both for help.

Quite complicated, but than no big surprise if we have such SUPER industry hanging on pockets of workforce and retirement age people.

G

Your calculations look about right to me but income is only half the story. You need to look at your assets also,that $200,000 in super is classed as an asset together with any shares, bank accounts, vehicles belongings etc excluding your family home (in most cases).

Then depending whether Income or Assets give the lower pension then that's what you get. Centrelink put out Rate Charts for pensioner couples and singles which show the pension rates for various asset and income levels, suggest you get a copy.

With the current income streams you decide a level between 5 and 15% of each members super assets. This is done when a member starts a income stream and then every year when you get your SMSF audited at the end of the financial year. I have a Market Linked income stream which has a term based on age (no longer available), but my wife has one of the current income streams and that has not applicable for the term.

Ian

Just remembered. I think the Centerlink web-site has a pension calculator. I haven't tried it but it could be useful.

Thank you all for extra information.

So if total assets are say 400,000 then it is calculated:

400,000 - 258,000 allowed assets = 142,000
This gives pension reduction:

142 x $1.50 = 213

1099 – 213 = $ 886 per fortnight

and this figure is compared with income based calculation to determine which one will cost the Government less.