Should You Leave Your Superannuation in the Accumulation Phase?
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Should You Leave Your Superannuation in the Accumulation Phase?

If you are retired or approaching retirement, you may be considering whether to leave your funds in accumulation phase or withdraw your account in full and deposit the funds into a bank account. 

Keeping your superannuation in accumulation means that your super will continue to be invested and (ideally) keep increasing until you are ready to withdraw it.

For those approaching retirement, it’s understandable that you want to have the best retirement plan possible. While there are a multitude of different ways to transition to retirement, one thing that you may want to consider is leaving superannuation in accumulation. 

However, this isn’t the best option for everyone. 

Your super is an incredibly valuable resource for retirement but it is also a very complex investment vehicle. You should always make careful, informed decisions surrounding your superannuation. 

Reasons why you may decide to leave super in the accumulation phase:

You Don’t Need the Extra Income

The most simple reason to leave super in the accumulation phase is that you don’t really need the extra income. 

If you have sufficient income from other sources or have adequate assets to cover your retirement, then you don’t need to draw income from your superannuation savings. 

To add to this, there are also tax advantages attached to the accumulation phase. All earnings received from investments within the accumulation phase are only taxed at 15%.

You Have More Than $1.6M in Super

Many of you may not know this, but there is actually a Transfer Balance Cap attached to super, and you can only withdraw a maximum amount of $1.6 million. 

If your balance exceeds this amount, then you may choose to leave some of it in your super balance in an accumulation account.

You Plan on Still Working

If you plan on still working, it can be wise to leave super in the accumulation phase. 

Why tap into these funds when you’re still earning money on your own, right? If you are earning enough income from your job or have sufficient income streams elsewhere, it may be worth leaving your super where it is.

Your Personal Insurance Is Tied to Super

Lastly, you’ll definitely want to leave your super in the accumulation phase if your current personal insurance is tied to super. This means that the insurance policy you have will remain in place, and the premiums can continually be paid from your member balance.

Remember, transferring all of your super accumulation savings to an income stream or even withdrawing the balance in full opens up the possibility of the policies lapsing and you may not be covered when you need it most.

Your superannuation is far too valuable of a resource to make the wrong decision with it. 

Take note that this isn’t the best option for everyone. As such, be sure to do what’s best for your specific financial situation because everyone’s finances are vastly different. 

If you need help getting your superannuation or retirement planning in order, our superannuation advisers in Australia are always available to assist you. 

We have experienced financial advisers in Port Macquarie that can help you make smart decisions with your super. Book a complimentary consultation with us today!


Disclaimer: The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice Group’s position and are not to be attributed to RI Advice Group. They cannot be reproduced in any form without the express written consent of the author. This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice. Newcastle Financial Planning Group, Central Coast Financial Planning Group, Coastal Advice Port Macquarie, and Sydney Wealth Advisers are subsidiaries of Coastal Advice Group which is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429
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