Did you know that you could get a retirement bonus from your Australian Super funds?
When you move super from an accumulation account into a retirement pension with your current Super provider, some Aussie super funds are providing cash bonuses at retirement for their members. It is money that was set aside to pay tax on capital gains that are expected to occur in the future … that is when assets that have increased in value are sold. Instead, they can be refunded to you and added to your pension account.
If your current fund is not offering a bonus, it could be worth considering a move to one that does, provided the new fund meets all your other requirements.
The average retirement bonus in Australia is between $2000 and $5000. That could be a great holiday for you to enjoy!
How is the retirement bonus is calculated
Super funds all have their own method of calculating a bonus payment, which is explained in their Product Disclosure Statement (PDS).
The methods we have found include:
- A flat percentage of your balance paid for all qualifying investment options (balanced, growth etc)
- A percentage of your balance that varies by investment option, with some options attracting a higher percentage than others based on their returns and tax position
- An individual calculation based on your period of membership, investment options and investment switching history.
Which Super funds offer a retirement bonus?
Providers such as AustralianSuper, Australian Retirement Trust, QSuper, Hesta, Rest, Telstra, Spirit and MLC offer a retirement bonus.
Many of the providers require you to be a member of their fund for a set period before you start a retirement pension to be eligible for a retirement bonus. If you’re thinking about switching to a provider with a good bonus, make sure you note this period and join the fund with time to accumulate your minimum membership before you plan to start a pension.
Minimum membership helps ensure there has been time for taxable capital gains to accumulate that will fund your bonus when you transfer to the pension.
Watch your transfer balance cap
Retirement bonuses are not contributions, and do not count towards either the concessional or non-concessional contribution caps.
However, the amount you receive as a retirement bonus will be included in your initial investment into a retirement pension. It does count towards your transfer balance cap (currently $1.9 million).
If you’re close to the cap, be sure to get in touch with your Super Fund to ensure that any retirement bonus paid doesn’t cause you to exceed the limit.
