Note, however, that whilst this will produce income for you, the income will be lumpy, with companies only paying dividends six-monthly, and somewhat unpredictably.
It’s probable that your total return will be lower with this arrangement than the earlier suggestion, as high-yielding Australian shares have tended to exhibit low levels of capital growth, but of course none of us possess a crystal ball.
I’m 64 and have been retired since I was 57. I have approximately $800,000 in a super pension, from which I draw down 6 per cent annually. My husband, also 64, has a PSS pension of $63,800 net after tax.
Next month, I will receive an inheritance from my mother of approximately $180,000. My preference is to allocate $150,000 to super. It has been suggested that I could open an accumulation account, deposit the $150,000 using bring forward provisions and then switch the account to pension mode.
If I do this, can I then combine the two pension accounts? Also, is the monies deposited into the accumulation account subject to 15 per cent tax?
There are various caps and limits to be mindful of here, but from the information you’ve provided, it would appear that you could contribute $150,000 into super as a non-concessional (ie. after tax) contribution. There is no tax levied on this contribution type.
To then merge this with your existing superannuation pension, you would have the existing pension rolled into the new accumulation account that you just created, and then once the money is all together in one account, convert that account to a new pension.
Given the sums involved here, the complexity around contribution limits, and the mechanics of bringing this money together into a single account, I’d urge you to obtain help from a qualified financial planner.
Paul Benson is a Certified Financial Planner. Questions to: paul@financialautonomy.com.au
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.