Financial Planner Luke Smith joined 2CC Talking Canberra 1206AM in The Money Show which aired on Friday 12 February 2021. This week’s topic: What is an account-based pension and how does it work?  But before they start talking financial matters, Luke is more than just a little excited, he’s just taken his first ride in a helicopter and arrived at 2CC in the field next to the car park. You’ll hear in his voice how much he loved it. 

In recent weeks Luke has looked at growing your super. Last week he spoke about transitioning to retirement from full time work. This week Luke explores the account-based pension. Many Australian’s use this investment vehicle to turn their superannuation savings into a retirement income stream.

Key highlights include:

• You’re retiring from the workforce and you want to turn your super into pension payments to help fund your retirement
• Underlying investments don’t need to change – despite what some people might think
• Pension payments can be taken fortnightly, monthly, quarterly or even less often, depending on what your provider offers 
• Earnings on account-based pensions are tax free. And if you held shares or other investments in the fund, you don’t pay capital gains tax when you sell them in this pension phase. 
• The transfer balance cap however does apply if you have more than $1.6 million in your pension fund. 
• So what is the transfer balance cap and how is this tax calculated? 
• Why is the transfer balanced cap indexed? 
• Once you start a pension, can you add more contributions to super?
• What are the Centrelink implications of an account-based pension?
• It’s possible to have an account-based pension and a Centrelink pension, depending on your circumstances
• Explore the other benefits too – discounts on electricity, licensee fees and pharmaceuticals, they all add up
• Some strategies to think about while considering your own plan for retirement
• A free appointment offer to talk about your own financial planning goals. Everyone has different goals and financial planning advice can help you achieve them more effectively, especially when you link different strategies.

Listen to the Podcast right now

Also available on Apple Podcasts and Spotify ‘The Strategy Stacker – Luke Talks Money’

Do you need advice to set up a retirement plan?  

Luke as a Financial Planner can help you set up a financial planning strategy to help you achieve your personal financial goals. Retirement planning can be complicated, but the good news is you can make an appointment to speak with Luke about your superannuation and retirement strategy – including the account-based pension.

Envision 2CC offer:  Your first appointment is at our cost. Make an appointment to confidentially discuss your own investment, super or retirement goals. Call Envision Financial Services on 6260 4749. You can also use our contact us form to make an appointment for a confidential discussion about your situation.

Luke will return to talk about financial planning on 2CC next Friday. You can also catch up with The Strategy Stacker – Luke Talks Money podcast.  We look forward to your company again.

Luke Smith joined 2CC Talking Canberra 1206AM.
The Money Show aired on Friday 24 January 2020.

What a year it’s been. The podcast kicks off with Luke and Leon reflecting about the state of the world and how nice it would be for things to settle down. In the latest podcast, Luke explores some of the key things people should consider before retiring or at retirement when it comes to generating an income from super. Did you know that you can change providers? 

Key highlights include:

• What is a pension account or more formally called ‘account based pension’
•  How do you get one? 
•  Can you take a lump sum if you need to or is it just pension payments?
•  Can you change providers or are you stuck with your current super provider?
•  What are some of the key things you should look for in a pension fund?
•  Is there a minimum you need to withdraw from a pension fund over a year?
•  Are there strategies you might consider before setting up a pension or during a pension?
•  What is transition to retirement and super splitting and how might they help you retire?
• Make the most of your opportunities, as well as the offer to seek advice with Envision Financial.

Listen to the Podcast right now

Also available on Apple Podcasts ‘The Strategy Stacker – Luke Talks Money’

Do you need help in setting up or checking your retirement plan?

Let us help you get your retirement plans in place.

Envision 2CC offer:  Your first appointment is at our cost. Make an appointment to confidentially discuss your financial situation and  financial goals. Call Envision Financial Services on 6260 4749. You can also use our contact us form to make an appointment for a confidential discussion about your situation.

Luke will return to talk about financial planning on 2CC Talking Canberra next Friday from 4.30pm. Tune into listen live or visit our website again to catch up on the podcast. You can also check out our YouTube Channel at Envision Financial Canberra.

Luke Smith joined 2CC Talking Canberra 1206AM.
The Money Show aired on Friday 8 November 2019.

As we approach the end of a year or financial year, the calendar prompts many people to think about their own retirement plans. In this podcast, Luke explores how to turn your superannuation into a retirement income stream and explores some of the important issues to consider before you decide to leave your job.

Key highlights include:

• When it comes to life after work, there’s no such thing as a dumb question.
• What’s the difference between a transition to retirement pension an account-based pension?
• Will you continue to work part-time or will you retire fully and cease employment?
• How often can you draw pension payments from either your transition to retirement or account based pension?
• An account based pension are very tax effective – but have you thought about your tax position with other assets?
• Also think about the relationship between partners to maximise your tax-free limits under the transfer balance cap.
• Why is seeking retirement advice before you leave work important?
• An offer to trail our knowledge centre which is full of information, videos and calculators at no cost. Checkout our online calculators too.

Listen to the Podcast right now

Also available on Apple Podcasts ‘The Strategy Stacker – Luke Talks Money’

Do you need advice on your retirement plans?

If would like to talk about setting some financial strategies to achieve your goals, including your retirement goals and planning, make an appointment to meet Luke at Envision Financial Services on 6260 4749. You can also use our contact us form to make an appointment for a confidential discussion about your situation. Envision Financial can also work with your estate planning solicitor or refer you to one if you don’t have one.

Envision 2CC offer:  Your first appointment is at our cost. Make an appointment to confidentially discuss your financial situation and  financial goals.

Luke will return to talk about financial planning on 2CC Talking Canberra next Friday from 4.30pm. Tune into listen live or visit our website again to catch up on the podcast. You can also check out our YouTube Channel at Envision Financial Canberra.

Luke Smith joined 2CC Talking Canberra 1206AM with Richard Perno.
The Money Show aired on Friday 31 May 2019.

Luke talks about retirement planning, super and pensions. They start the conversation though talking about tax deductions as we approach the end of financial year. Luke also talks about the government decision to cancel people’s insurance in their super, without asking them. This could leave them high and dry if something was to happen.

Key highlights include:

• What is the difference between superannuation and a pension?
• Don’t confuse your Super Pension with the Centrelink Age Pension – the Age Pension has nothing to do with when you can access a pension from your super.
•  What are the rules around accessing your super?
•  Can you keep you pension going if you change your mind and return to work?
•  How much do you need to accumulate? It depends on your resources and lifestyle costs – everyone is different.
•  Why super is a good vehicle to save for retirement – you might even be able to get a tax deduction for contributions you make.
•  How to put money and assets into super and what is super splitting?
•  Are there caps on the amounts of money into your superannuation?
• How often can you take a pension payment from your account?  You can take lump sum payments too!
•  End of financial year issues – don’t miss the 30 June deadline
• Pensions can be complicated, there are rules so seek financial advice if you need to.
•  An offer to trail our knowledge centre which is full of information, videos and calculators at no cost.

Listen to the Podcast right now

Also available on Apple Podcasts 

Do you need super or pension advice?

If you need financial advice or would like to talk about accessing your super or retirement plans, make an appointment to meet Luke at Envision Financial Services on 6260 4749 or use our contact us form to make an appointment for a confidential discussion about your situation.

Envision 2CC offer:  Your first appointment is at our cost. Make an appointment to confidentially discuss your financial situation and  financial goals.

Luke will return to talk about financial planning on 2CC Talking Canberra next Friday from 4.30pm. Tune into listen live or visit our website again to catch up on the podcast. You can also check out our YouTube Channel at Envision Financial Canberra.

Luke Smith joined 2CC Talking Canberra 1206AM with Richard Perno.
The Money Show aired on Friday 24 May 2019.

Luke talks about how to turn your super into a retirement income. It’s called a pension, and it’s in addition to the government pension you might be eligible to receive. They start the conversation though talking about the election result that’s left many retirees relieved, given there will be no changes to franking credits that help fund their retirement income.

Key highlights include:

• What is a pension?
• Why retirement looks different these days – it might be part time work or contracting, and topping up your wages with a pension from your super.
• What is an account-based pension? (When you’re retired)
• What is a transition to retirement pension? (When you’re still working)
• How to use a pension to fund super contributions or help pay off the mortgage if you’re still working and have met your preservation age (depends on your date of birth).
• Don’t confuse your Super Pension with the Centrelink Age Pension – the Age Pension has nothing to do with when you can access a pension from your super.
• The benefits of making a contribution to your super and getting a tax deduction.
• How often can you take a pension – fortnightly, monthly, half-yearly or yearly.
• Pension benefits – there’s no tax within an allocated pension, up to the allowable limits.
• Pensions can be complicated, there are rules so seek financial advice if you need to.

Listen to the Podcast right now

Also available on Apple Podcasts 

Do you need super and pension advice?

If you need financial advice or would like to talk about accessing your super or retirement plans, make an appointment to meet Luke at Envision Financial Services on 6260 4749 or use our contact us form to make an appointment for a confidential discussion about your situation.

Envision 2CC offer:  Your first appointment is at our cost. Make an appointment to confidentially discuss your financial situation and  financial goals.

Luke will return to talk about financial planning on 2CC Talking Canberra next Friday from 4.30pm. Tune into listen live or visit our website again to catch up on the podcast. You can also check out our YouTube Channel at Envision Financial Canberra.

Luke Smith joined Richard Perno on Radio Station 2CC Talking Canberra 1206AM.
The Money Show aired on Friday 26 October 2018.

Luke and Richard continued the conversation about retirement planning and specifically about what happens if you made the decision to retire, but then decide you want to go back to work. It might be part time or full time work. Is it possible? What are the implications?

Topics covered include:

• The reasons to return to work after retirement.
• Will you be an employee, or a contractor – are there differences?
• If you’ve turned your super into a pension, you’ll need a new super account to receive contributions. 
• Why it’s important to think about tax and returning to work, there are issues to consider.
• It’s not necessarily about returning to your old job, it could be a new role and a part time role or working from home
• And can you retire again when you’re ready?
• Seek returning to work advice and retirement planning advice so you make the most of your options. It pays to understand your options before you make a decision. 

Listen to the Podcast right now:

Do you need retirement planning advice?

If you need financial advice, make an appointment to meet Luke at Envision Financial Services on 02 6260 4749 or use our contact us form to make an appointment for a confidential discussion about your situation.

Envision 2CC offer.  Your first appointment is at our cost. Make an appointment to confidentially discuss your financial situation and  financial goals.

Luke Smith joined Richard Perno on Radio Station 2CC Talking Canberra 1206AM.
The Money Show aired on Friday 19 October 2018.

Luke and Richard continued the conversation about retirement planning and specifically about the process about making the decision to retire and if you can return to work once you have made the decision to pull up stumps.

Topics covered include:

• How do you know when the time to retire is right?
• Why isn’t retirement just a financial decision?
• Why are you going to retire?
• Can you return to work after you retire or part-time work? 
• What are some pitfalls that people making around leaving work?
• Seek planning for retirement advice so you make the most of your options. It pays to start sooner than later. With more time on your side you have more options.

Listen to the Podcast right now

When do you want to switch on your retirement?

If you need financial advice, make an appointment to meet Luke at Envision Financial Services on 02 6260 4749 or use our contact us form to make an appointment for a confidential discussion about your situation.

Envision 2CC offer.  Your first appointment is at our cost. Make an appointment to confidentially discuss your financial situation and  financial goals.

Luke Smith joined Richard Perno on Radio Station 2CC Talking Canberra 1206AM.
The Money Show aired on Friday 12 October 2018.

Luke and Richard continued the conversation about retirement planning and specifically about a financial planning strategy called transition to retirement.

Topics covered include:

• What is a transition to retirement strategy?
• What kind of people is a transition to retirement useful for? It’s a great strategy for employers too!
• When is a good time to transition?
• How do you transition to retirement?
• Can Government superannuation holders transition?
• Seek planning for retirement advice so you make the most of your options. It pays to start sooner than later. With more time on your side you have more options.

Listen to the Podcast right now

When do you want to switch on your retirement?

If you need financial advice, make an appointment to meet Luke at Envision Financial Services on 02 6260 4749 or use our contact us form to make an appointment for a confidential discussion about your situation.

Envision 2CC offer.  Your first appointment is at our cost. Make an appointment to confidentially discuss your financial situation and  financial goals.

Luke Smith joined Richard Perno on Radio Station 2CC Talking Canberra 1206AM.
The Money Show aired on Friday 5 October 2018.

Luke and Richard continued the conversation about retirement planning and how to you can turn super into a retirement income.

Topics covered include:

• What is the different between the accumulation phase and the pension phase?
• Steps to think about when your planning your retirement before you leave the workforce, including: What income you need? How you can generate it? When you need it? 
• What is an account based pension?
• How much income can you take? Can you take a lump sum?
• How does an account based pension work and how much income can I take from it?
• Can you splurge in retirement on a holiday or new car?
• What happens can I add money to my account based pension if I receive an inheritance?
• Seek planning for retirement advice so you make the most of your options. It pays to start sooner than later. With more time on your side you have more options.

Listen to the Podcast right now

When do you want to switch on your retirement?

If you need financial advice, make an appointment to meet Luke at Envision Financial Services on 02 6260 4749 or use our contact us form to make an appointment for a confidential discussion about your situation.

Envision 2CC offer.  Your first appointment is at our cost. Make an appointment to confidentially discuss your financial situation and  financial goals.

Luke Smith joined Richard Perno on Radio Station 2CC Talking Canberra 1206AM.
The Money Show aired on Friday 10 August 2018.

Luke and Richard talk about how to turn your super into an income stream with an account based pension.

Topics covered include:

• What an account based pension is? (formerly called an allocated pension)
• How old you have to be to retire and what retirement actually means
• The benefits of account based pensions – like tax free earnings and no capital gains tax
• Be aware of the rules around retirement, and
• Seek advice before you retire so you make the most of your options – it pays to plan.

Listen to the Podcast right now

If you need advice, contact Luke on 02 6260 4749 or use our contact us form to make an appointment for a confidential discussion about your situation.

Envision 2CC offer – Your first appointment is at our cost, so make an appointment to confidentially discuss your financial situation and retirement goals.

Once you retire, your transition to retirement turns into an account based pension. A transition to retirement strategy is worth considering as you approach life after work.

If you missed the discussion click here to listen to the podcast now.

The topical discussion of Franking credits is also touched on and how it is likely to impact self-funded retirees.

The acronym of the week is DPS – Dividend Per Share. It’s the income you earn from shares like ANZ or Commonwealth Bank. A high DPS will mean you have more income for your retirement and it’s something we consider when constructing retirement income streams for clients.

Contact Luke on 02 6260 4749 or use our contact us form to make an appointment for a confidential discussion about your situation.

Envision 2CC offer – Your first appointment is at our cost, so make an appointment to confidentially discuss your financial situation and retirement goals.

Luke will be back on 2CC Friday 13 April – 2CC 1206AM, at 4.30pm.

• An account-based pension,
• A defined benefit pension,
• Investments outside of superannuation,
• Part-time employment,
• Centrelink age pension entitlements,
• Home equity release, or
• Downsizing the family home.

So what is an account-based pension?

A superfund where your employer or yourself can put in money and your money is invested to get a return is called an accumulation fund. At retirement, you can turn your accumulation fund into an account-based pension to receive an income stream.

What are the typical features of an account-based pension?

• You can choose the amount of income you receive each year, within a range set by law.
• You can invest your money in the same kinds of assets that you’ve held in your super fund.
• Your account-based pension income can usually paid month, quarterly, half-yearly or yearly. You get to choose.
• You are allowed to take a lump sum withdrawal, known as a commutation, from your account-based pension, should you need some extra cash.
• Your account-based pension will continue to pay you until the money runs out.
• You get to make a choice about what happens to your account-based pension if you pass away.

What are the typical advantages of an account-based pension?

There are a number of benefits to having an account-based pension in retirement. These might include:

• In addition to your account-based pension, you may be able to access Centrelink age pension entitlements. Asset and income tests apply.
• You won’t pay tax on pension payments once you turn 60 years of age.
• Your investment earnings on an account-based pension are tax-free provided you have $1.6 million or less in your account at the time of starting the account-based pension. If you have more than $1.6 million then penalties may apply.
• You decide (within a range) what pension payments you want to receive and if you want to take a lump sum.
• You can choose how your money is invested, just like you did with your accumulation superfund.
• Surplus franking credits are returned to the fund to bolster returns and to help fund pension payments.
• You decide what happens to your account-based pension should you pass away. You might elect to have it paid in full to your beneficiaries or spouse. You can also nominate a spouse or dependent person to receive your ongoing pension payments. This is called a reversionary pension.

What are the typical disadvantages of an account-based pension?

There are a couple of drawbacks to having an account-based pension in retirement. These can include:

• Your investments, just like in your accumulation superfund are not guaranteed and will fluctuate as investment markets move. Performance will be affected by the investment options you choose.
• There is no guarantee that your account-based pension will last as long as you do. You may outlive your pension payments. This is one reason why it is important to have a plan.
• You must draw an annual pension payment equal to the legislated minimum each year. This will require you to review the assets held to meet liquidity requirements throughout the year.
• The asset value and associated income are generally assessable for Centrelink purposes. Some grandfathering provisions may apply depending on when your income stream was commenced.
• Generally, once a pension income stream is commenced you cannot add to its capital value.

How do you determine if an account-based pension is appropriate for you?

Seeking advice can help you understand your retirement goals, assess your retirement income options and put a plan in place to deliver you with a retirement income stream.

Financial planning advice can help you work out:

• If you and when you can afford to retire.
• How much income you can receive.
• How an account-based pension might work for your retirement.
• How Centrelink age pension can fit with an account-based pension.
• Which investment options are appropriate for you.
• Estimate the length of the pension, given certain scenarios.
• Help you put in place estate planning matters around an account-based pension.
• Take into account the recent legislative changes that impact the tax efficiency of pension structures.

To make an appointment to speak with Luke, please call Envision Financial Services on 02 6260 4749 or contact us here.