What is pension phase in Australian super?

When you retire and start drawing an income from super (account-based pension), the fund moves to pension phase. Earnings on assets supporting the pension are completely tax-free (0%), compared to 15% in accumulation phase. This is a significant advantage for large super balances.

What is the Transfer Balance Cap?

$1.9 million (2024-25). Limits the amount you can transfer into tax-free pension phase accounts. Amounts above the cap must remain in accumulation (taxed at 15%). The cap is indexed to CPI in $100,000 increments.

What happens to CGT when transitioning to pension phase?

Special CGT relief allows assets to be reset to market value when moved to pension phase (if you elect by the relevant date). Without the reset election, the original cost base carries over, potentially creating large capital gains on future disposal of assets.

Australia Superannuation Pension Phase Tax Calculator

Calculate tax benefits of moving Australian super to pension phase. Accumulation: 15% tax on earnings. Pension phase: 0% tax on earnings and income up to Transfer Balance Cap ($1.9m in 2024-25). Shows tax saving from pension phase.

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Frequently Asked Questions

What is pension phase in Australian super?

What is the Transfer Balance Cap?

What happens to CGT when transitioning to pension phase?