{"id":100818,"date":"2025-01-30T11:30:23","date_gmt":"2025-01-30T00:30:23","guid":{"rendered":"https:\/\/en.econostrum.info\/au\/?p=100818"},"modified":"2025-01-30T11:30:26","modified_gmt":"2025-01-30T00:30:26","slug":"this-one-mistake-is-costing-aussie-retirees-9000-in-super-taxes-are-you-one-of-them","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/au\/this-one-mistake-is-costing-aussie-retirees-9000-in-super-taxes-are-you-one-of-them\/","title":{"rendered":"This One Mistake Is Costing Aussie Retirees $9,000 in Super Taxes\u2014Are You One of Them?"},"content":{"rendered":"\n<p>Many Australian retirees could be paying more tax than necessary due to a lack of awareness about superannuation rules. New research suggests that around <strong>700,000 Australians over 65<\/strong> may still have their superannuation in an <strong>accumulation phase<\/strong> account, leading to avoidable tax payments.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">The Difference Between Accumulation and Retirement Phases<\/h2>\n\n\n\n<p>Superannuation in Australia operates in two phases:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Accumulation phase<\/strong>: The stage where superannuation savings grow before retirement. Investment earnings in this phase are taxed at <strong>15%<\/strong>.<\/li>\n\n\n\n<li><strong>Retirement (or pension) phase<\/strong>: Super funds can be <strong>converted into an income stream<\/strong>, with investment earnings becoming <strong>tax-free<\/strong>.<\/li>\n<\/ul>\n\n\n\n<p>Once Australians reach retirement age, they have the option to <strong>move their super from the accumulation phase to the retirement phase<\/strong>. However, research by the <strong>Super Members Council<\/strong> found that many retirees are not making this transition, potentially paying <strong>hundreds or thousands of dollars more in tax<\/strong> than they need to.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How Much Extra Tax Are Retirees Paying?<\/h2>\n\n\n\n<p>The study found that retirees keeping their super in an accumulation account could be paying an additional <strong>$650 per year<\/strong> in taxes. Over the course of retirement, this could <strong>add up to $9,000<\/strong> in unnecessary tax payments for someone with an average super balance of <strong>$200,000<\/strong>.<\/p>\n\n\n\n<p>For many, this financial impact is not a strategic decision but rather a result of <strong>lack of awareness<\/strong> or <strong>inertia<\/strong>. Some retirees may not know how to switch their super, while others may not be actively managing their accounts.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Calls for Financial Advice Reforms<\/h2>\n\n\n\n<p>Misha Schubert, CEO of the Super Members Council, emphasized the importance of <strong>accessible financial advice<\/strong> to help retirees make informed decisions. Many Australians do not receive <strong>basic superannuation advice<\/strong>, leading to suboptimal financial choices.<\/p>\n\n\n\n<p>\u201cNot knowing enough about super can lead to poor decisions, like leaving accounts inactive or withdrawing funds without proper planning,\u201d Schubert said.<\/p>\n\n\n\n<p>The <strong>Australian government<\/strong> is now working on financial advice reforms to make retirement planning more accessible and affordable.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What Changes Are Coming to Superannuation Advice?<\/h2>\n\n\n\n<p>In <strong>December 2023<\/strong>, the <a href=\"https:\/\/en.econostrum.info\/au\/the-end-of-poor-service-superannuation-funds-under-government-scrutiny\/\" target=\"_blank\" rel=\"noreferrer noopener\">federal government announced reforms<\/a> aimed at improving <strong>access to financial advice<\/strong> through super funds. These changes include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>A new category of financial adviser<\/strong>: Designed to provide <strong>safe and simple<\/strong> financial guidance for everyday Australians.<\/li>\n\n\n\n<li><strong>More proactive super fund communication<\/strong>: Funds will be allowed to send <strong>reminders and nudges<\/strong> at key life stages, such as retirement, to encourage better decision-making.<\/li>\n\n\n\n<li><strong>Mandatory service standards<\/strong>: Super funds will face <strong>new requirements<\/strong> for processing payments, particularly in cases of death and disability claims.<\/li>\n<\/ul>\n\n\n\n<p>Research from the <strong><a href=\"https:\/\/www.superannuation.asn.au\/\" target=\"_blank\" rel=\"noreferrer noopener\">Association of Superannuation Funds of Australia<\/a> (ASFA)<\/strong> found that <strong>one in two Australians<\/strong> have never accessed professional advice about retirement. These reforms aim to <strong>bridge the knowledge gap<\/strong> and ensure retirees make the most of their super.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What Should Retirees Do Now?<\/h2>\n\n\n\n<p>Retirees who still have their super in an accumulation account may benefit from <strong>reviewing their options<\/strong>. Moving funds to a <strong>retirement phase account<\/strong> could result in significant <strong>tax savings<\/strong>. Those uncertain about the process may consider <strong>consulting a financial adviser<\/strong> or checking their super fund\u2019s guidance services.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Hundreds of thousands of Australian retirees could be paying more tax than necessary\u2014and many don\u2019t even realize it. A simple superannuation move could mean thousands in savings, yet research shows a staggering number of retirees haven\u2019t taken action. <\/p>\n","protected":false},"author":5,"featured_media":100821,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[45,29],"tags":[],"class_list":["post-100818","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-retirement","category-taxation","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33","no-featured-image-padding"],"_links":{"self":[{"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/posts\/100818","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/comments?post=100818"}],"version-history":[{"count":3,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/posts\/100818\/revisions"}],"predecessor-version":[{"id":100822,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/posts\/100818\/revisions\/100822"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/media\/100821"}],"wp:attachment":[{"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/media?parent=100818"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/categories?post=100818"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/tags?post=100818"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}