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  1. Freddie Ambler

     /  April 26, 2013

    If I leave super in accumulation phase I pay 15% tax on the earnings. If the earnings are 5% of the funds then the annual tax is less than 1% of the funds. This small tax cost needs to be considered against the loss of flexibility (compulsory withdrawal of funds) and additional costs of the pension (eg brokerage fees for the withdrawals).

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    • Hi Freddie

      I agree that your strategy may work for some but imagine a year like we are having now where in some cases people are looking at 20% plus returns on their portfolios and actually taking some of the gains and incurring the CGT as they feel the markets may be fully priced. In this case they are looking at substantially more in taxes if still in accumulation. Any fund should have a cash reserve in a high interest account to fund pensions so brokerage fees should not come in to it. Oh and the Nil tax means people are more likely to take some profits and not to hold on to stocks just because of CGT.

      But that is the beauty of a SMSF, you have the ability to make those decisions to suit your own circumstances and beliefs. I have clients who have gone in to and back from pension phase as and when it suits them.

      best wishes and thanks for engaging in comment.

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