Question
Mick is 58 and retired. He has a superannuation account balance of $800,000, which is in its accumulations phase. The $800,000 is made up of
Mick is 58 and retired. He has a superannuation account balance of $800,000, which is in its accumulations phase. The $800,000 is made up of $100,000 of concessional contributions, $200,000 of earnings, and $400,000 of non-concessional contributions. The superannuation funds are invested in the share market.
Mick has a strong belief that the share market will perform very well in the next 12 months. On the assumption that he is correct, Mick wishes to know the effect of the following:
- Keeping his account in accumulation mode and commencing an account-based pension in a years time.
- Commencing an account-based pension immediately.
- Withdrawing $300,000 from his superannuation, recontributing it, and immediately commencing an account-based pension.
Advise Mick as to the tax consequences of these options. You are not required to calculate the precise amount of tax payable or make other precise calculations.
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