Question 1

My wife and I are 58. I plan to transition to retirement at 60 (while working FIFO at one or two rosters a year) and my wife has already stopped work due to health.

We have no debt. My wife has super of $450,000, while I have $800,000.

At 67, we will also get a UK pension of $20,000 each a year.

How do couples work out whether to draw down on both industry super at retirement or basically drain one and then the other?

It sounds like you are in a solid position.

First, work out how much you need to live off as a couple.

I note that you will receive a UK pension each. This amount will vary depending on the exchange rate each payment. While this will affect your Australian age pension from age 67, you will probably still receive a part age pension if you meet all the residency requirements (and depending on the value of all of your assets).

It really doesn’t matter how you draw the funds out, except it would be worth moving both funds into pension phase to gain the tax benefits.

For couples, the two most common approaches are:

• Draw down the same amount from each fund. Say you need $50,000 a year, then simply draw $25,000 from each. Of course, the lower balance fund will run out first
• Draw them down at about the same rate. Again, say you need $50,000 then draw 4 per cent down from each fund ($32,000 from the $800,000 fund and $18,000 from the $450,000 fund).

Question 2

Hi Craig. My wife and I both took advantage of the bring-forward rule to deposit $360,000 each into our respective super accounts as post-tax contributions in late 2024, prior to our 72nd birthdays in early 2025.

These funds were withdrawn from my super account, with a majority component being pre-tax contributions. To my knowledge, we cannot make further post-tax contributions till late 2027.

We were considering downsizing within the next three years, but were under the impression that we can only make downsizer contributions to our super accounts prior to our 75th birthdays. If that is correct, then we only have a small-time window to achieve our plan.

Can you please confirm if there is an age limit to downsizing contributions.

Hello,

The downsizer contribution rules are very flexible and generous.

There is no maximum age limit for downsizer contributions. This is unlike all other personal contributions to super, which do have a maximum age limit. (The minimum age to use the downsizer super contribution rules is 55).

Therefore, there is no rush. Whenever you do sell your home, you can then look to make this type of contribution, up to $300,000 each.

Interestingly, there are no actual requirements to “downsize” your home. You could sell your home, buy another one for the same or even higher value and still potentially be eligible to make a “downsizer” contribution (if you have other money sitting around in your bank account, say).

Apart from being at least 55, and being limited to $300,000 each, the main eligibility requirements are:

• You have owned the home for at least 10 years, and for at least part of that period it has been your main home
• You must make the contribution within 90 days of the settlement date
• You can only make a downsizer contribution in relation to one home
• Ensure you use the correct form to notify your super fund that it is a “downsizer” contribution.

Question 3

I have $230,000 in super and $1.7 million in the bank. What are my best retirement options?

As you nearly have $2 million, you do have some options. However, first, what do you want to do?

• Do you want to retire now, in 10 years, at age 60 or at some other point?
• What do you want to do in retirement? How much will that cost?
• Is there some other non retirement goals that you want to spend some money on?

Money in super will generally provide you with the best tax outcome. However, you cannot access that until age 60. If you want to retire before then, you need to keep at least some funds accessible.

As a first step, break down the amount you want to live off between retiring and age 60. Keep enough funds set aside for this.

Then look at putting left over funds into super. These funds need to last from 60 onwards.

Set some goals and speak with a financial adviser.

Craig Sankey is a licensed financial adviser and head of Technical Services and Advice Enablement at Industry Fund Services.

Disclaimer: The responses provided are general in nature, and while they are prompted by the questions asked, they have been prepared without taking into consideration all your objectives, financial situation or needs.

Before relying on any of the information, please ensure that you consider the appropriateness of the information for your objectives, financial situation or needs. To the extent that it is permitted by law, no responsibility for errors or omissions is accepted by IFS and its representatives.