Regarding your future inheritance, if the amount is substantial, you may benefit from adding what you can into your super, as you will still have room available within your transfer balance cap.
While you can’t contribute to an existing pension account, you can open a new accumulation account if needed. If the inheritance exceeds your super contribution limits, you will likely invest the excess in your personal name, making it subject to tax. This underscores the importance of maximising the amount in tax-free pensions, to optimise your overall financial efficiency.
Your scenario is certainly one where you would benefit from having a relationship with a financial planner.
We have two children who we want to give money to in the next five years. Can we access $20,000 from our super for this purpose? We are 62 and 63 and will retire at 65. We have some cash savings and are wondering whether we should be adding this to our super.
To access money from superannuation, you need to satisfy a condition of release. The easiest one to satisfy is reaching age 65. At that point, it doesn’t matter whether you are working or not, your superannuation is accessible. So if the gifts are to occur beyond this age, no problem.
Before that, though, you can access superannuation from age 60, but you need to have had a period where you were not working. On the information you’ve provided here, it’s not obvious that you would satisfy this requirement. Therefore, your decision would be based on whether the gifts will happen before or after you turn 65.
Paul Benson is a Certified Financial Planner at Guidance Financial Services. He hosts the Financial Autonomy podcast. 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.
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