Hostplus has introduced a new feature that offers eligible members a “retirement bonus” when transitioning from the accumulation phase to the pension phase. This cash boost can provide a financial lift as Australians move into retirement.
The Mechanics Behind the Retirement Bonus
Hostplus has upgraded its internal systems to streamline the process, making it easier for members to claim the bonus. The bonus is essentially a payout from the portion of the investment returns that were set aside to cover future capital gains tax when the fund’s assets are sold. This “tax reserve” is no longer needed when a person enters the tax-free pension phase. So instead of keeping that reserve in the system, Hostplus is giving it back to its members as a bonus payment.
How much will you get? That depends on your balance and investment allocation. For example, if your superannuation balance is $500,000 at the time of switching to the pension phase, you could receive a boost of $7,800. For those with $1 million in their account, the bonus could reach as high as $15,600, details Yahoo Finance. This extra cash can go a long way, whether it’s used to top up retirement savings or simply give you a little more breathing room financially as you transition into this next stage of life.
Why the Change Matters
For many Australians, this change comes at a crucial time. The number of retirees is expected to nearly double in the next decade, and as the “silver tsunami” approaches, superannuation funds are ramping up efforts to meet the needs of an aging population. Hostplus, which serves nearly two million members, is offering this boost as part of a wider effort to deliver better outcomes for its members as they head into retirement.
The change is also a reflection of Hostplus’ belief in fairness and transparency. Previously, the money in the tax reserves was distributed as part of the regular tax process, which was factored into the calculation of unit prices. But with this new bonus system, Hostplus is ensuring that members receive a more immediate and equitable distribution of these funds at a pivotal point in their lives.
A Changing Superannuation Landscape
This isn’t the first change in the superannuation industry designed to benefit retirees, and it likely won’t be the last. As Australia’s superannuation system continues to evolve, we can expect to see more funds offering tailored features like these to improve the retirement experience. With the number of Australians entering retirement set to grow rapidly in the coming years, this kind of proactive approach is crucial to ensuring that the superannuation system can support future retirees in a meaningful way.
For Hostplus members, this new bonus is a small but impactful step that could help make a big difference when it comes to the reality of living off superannuation. In a world where financial security in retirement often feels out of reach for many, this move gives retirees a little more peace of mind.
