Strategy, Superannuation

Advisers seeking more information on early access

Early access to superannuation remains a key area of interest for the clients of financial advisers, according to AMP’s technical superannuation adviser support team.

The team, headed by AMP technical strategy manager John Perri, received more than 2000 calls from advisers in February, which included a spike in the number of queries related to early access to super.

Related questions received by the adviser support team included the conditions for release, the level of non-concessional contributions allowed and how transition-to-retirement pensions work, AMP said. Additionally, the team also received queries about how the superannuation death benefit operates and how total and permanent disability insurance works within superannuation.

Perri said the volume and type of calls received by the team provide an insight into the key issues that are being dealt with by advisers and the past month saw a focus on the conditions that had to be met before people could access their super.

“In particular, many Australians don’t realise they can access super early if they change jobs between the ages of 60 and 65, even if they continue working in a new job,” he said.

He said during this period super benefits were accessible as a tax-free lump sum or could be used to commence a retirement income stream, which would be tax exempt on earnings and had no maximum pension restriction.

“This may be more flexible and tax efficient than using a transition-to-retirement pension, which does not receive a tax exemption on earnings and has a maximum income payment of 10 per cent of the account balance,” he said.

“The key insight is if someone is changing jobs on or after age 60, it may be an opportunity to consider accessing your super. However, it’s important that people fully understand the policy and carefully consider the potential impacts on their super before they decide to access it.”

Copyright © SMS Magazine 2024

ABN 43 564 725 109

Benchmark Media

Site design Red Cloud Digital