Things are looking up for super fund balances, with returns back in the black for last year. After two years of losses, the average return is now 9.6 percent and the government’s continued pension draw down relief means retirees now have the chance to boost super fund balances.
For the last two financial years, the government has halved the minimum amount a retiree must withdraw from a super fund. This will now continue for the 2010-11 financial year, allowing retirees to claw back some of the money lost during the GFC.
The minimum amounts which must be withdrawn vary by age. The table below details the percentage of a super fund balance which must be withdrawn for the 2010/11 financial year.
These rules apply to those who have retired and converted their super fund balance to an account-based pension, those with self-managed super funds and those who are still in the workforce and are using transition to retirement rules to draw a pension to enable them to reduce their working hours.
For those who rely on a pension drawdown to maintain a reasonable income this will have little effect but for those who can afford to keep their pension where it is, the tax-free environment remains the best place for their money to grow.
To find out more about pension drawdown relief, click YOURLifeChoices simple short cut.