Retirement phase: the good, the bad and the must-know

And in today's newspapers, 'Women must act now if they want to save their retirement. Here’s how' '

In this edition

Feature: Retirement phase: the good, the bad and the must-know

From Bec’s Desk: A windy week

SMH/TheAge: Women must act now if they want to save their retirement. Here’s how

Prime Time: How to get the right financial advice for you

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Retirement phase: the good, the bad and the must-know

So, you’ve hit that point where you can start drawing an income from your super or you can see it coming. That means you’re officially ready for the retirement phase—or as it’s more technically known, pension phase. Sounds great, right? No more 15% tax on your super earnings, regular payments landing in your bank account, and total financial freedom? Well, mostly. But, as always, there’s things people need to understand.

About 4.2 million Australians count themselves as retired in Australia today, but only 1.4 million are drawing down on their superannuation using a tax-free account based pension. ‘Why?’ I hear you ask. Well, it’s a bit of a mystery really. Some people don’t understand the benefits, or don’t realise they can shift their super to tax-free status. While others are using super as a safety net savings account — and ignoring it until later in life. So I thought it might be useful to explain the retirement phase tax benefits today — the good and the bad.

The good

✅ No more tax on investment earnings – While your super is in accumulation, earnings get taxed at 15%. In retirement phase, that drops to 0% on both capital gains tax and income tax. That’s a big deal.

✅ Regular income payments – Instead of watching your super balance go up and down, you’ll get a set income stream that you define. Most superfunds will pay it into your account fortnightly or monthly if you choose. This can feel like a paycheck and helps with budgeting, taking the guesswork out of managing your cash flow.

✅ Flexibility to draw down – You can withdraw as much as you want, whenever you want (as long as you adhere to the a minimum drawdown rate). If you want to take out a lump sum for travel or a big expense, you can.

✅ Estate planning benefits – Pension accounts can be more tax-friendly for passing on wealth, depending on your beneficiaries. And you can work on a recontribution strategy to maximise the tax effectiveness to your estate up to the age of 75.

The bad (or the things to consider)

❌ You must withdraw a minimum amount each year – The government makes you start drawing down your super. If you’re aged 60-65 you must withdraw at least 4% of your balance each year. From 65-74, you must withdraw 5% of your balance and it increases as you get older.

❌ Super in accumulation still gets taxed – If you keep some money in accumulation, earnings on that portion are still taxed at 15%. Only money moved into retirement phase gets the tax-free treatment.

❌ Centrelink counts all your super after 67 – If you're under 67, super in accumulation phase isn’t counted in Centrelink’s Age Pension assets test. If you have a younger partner, their super in accumulation phase remains exempt from the assets test until they turn 67. This can be an advantage if one partner is eligible for the Age Pension while the other’s super stays unassessed. However, any super moved into pension phase is counted immediately, regardless of age.

❌ No going back – Once you move money into pension phase, you generally can’t move it back into accumulation unless you commute the pension and transfer the balance back to accumulation. However, if you want to add more money to super later, you’ll need to make new contributions (usually by opening a new accumulation account in parrallel with your retirement phase account) and you’ll need to stay within the contribution caps.

You also need to be aware of the transfer balance cap (TBC), which is currently $1.9 million (2024-25) and set to move to $2.0M at 1 July 2025. Once you have used part of your cap, any future amounts commuted then moved into pension phase will count against your TBC again. Even if you commute (move money back into accumulation), your used TBC amount does not reset—so you can’t start a new pension with more than your remaining cap.

Of course, you can withdraw funds and recontribute to super using any remaining caps. If you end up with an accumulation account and a pension account (which many do who decide to do some part-time work, you’ll probably end up paying two sets of fees — worth being aware).

So, what’s the best move?

If you want to stop paying tax on your super’s investment earnings, moving to pension phase makes sense—because super in pension mode is tax-free.

If you don’t need the income yet, you could keep some money in accumulation (where you’re not forced to withdraw a percentage each year) and move the rest into pension phase for the tax-free benefits.

The big advantage of pension phase is saving tax—but once you move money into pension mode, you must start drawing it down. If you’re happy with that, it’s usually the better option. 🚀

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Cyclone Alfred disrupted my week — but those of us in Brisbane are feeling lucky today that the wind did not arrive in the worst case scenario. I wish everyone good luck over the days ahead and with the clean up.

For those following along for news of my 12-year old dog. He’s improving a little — can hold his head up, is eating well but still arms and legs are paralysed. Still crossing our fingers for incremental (or speedy🙏) improvements. He’s in great spirits, if a little frustrated.

This week I’m all ready and raring to go for the two events I am doing in Sydney on Tuesday the 11th March. They’re being held at the West Ashfield Leagues Club. Both are free, hosted by Inner West Council.

12.00- 1.30pm — The 12 Secrets of an Epic Retirement. More info/ https://events.humanitix.com/how-to-prepare-for-an-epic-retirement

6-7.30pm — How to prepare for an Epic Retirement. More info/RSVP https://events.humanitix.com/12-secrets-of-an-epic-retirement

This week the Autumn Epic Retirement Course is in Week 4, with Jen Harding from HESTA joining us for our live Q&A about how superannuation funds work and the advice on offer. This cohort is rather amazing — with so many questions asked they’re running over time each week. It’s keeping me and our guests on our toes!

And our Winter How to Have an Epic Retirement Flagship Course is opening for booking this week and will kick off on the 10 April 2025. — you can register your interest for our earlybird deal here.

I’ve just submitted the next edit of Prime Time — it’s the last time I can really change it much. Exciting times. The cover reveal is coming very soon.

And finally, on this week’s podcast I took my conversation on financial advice further and deeper, talking to David Lane about how we can all recognise good financial advice when we see it. A tough conversation but an important one.

Don’t forget, you can always email me at bec@epicretirement.com.au. I love it when you tip me off on things that I can help with or reply with insights.

Many thanks! Bec Wilson

Author, podcast host, columnist, retirement educator, and guest speaker

Women must act now if they want to save their retirement. Here’s how

Extract of article published in print in The Age, The Sydney Morning Herald, Brisbane Times, WA Today on Sunday 8th March 2025.

I’m a woman approaching 50, and I’ve learned a few things the hard way. If I could go back and give my younger self advice – or offer lessons to other women in the workforce – I wouldn’t be talking about skincare, wardrobe or career hacks.

I’d be telling her to take her financial future seriously. Because here’s the thing: by the time you reach my age, the gender pay gap isn’t just an abstract issue or a talking point in a boardroom. It’s the reason so many women over 50 are staring down an inferior retirement compared to men, with fewer options and a lot more stress.

And if you’ve ignored the problem for decades, it’s damn hard to fix.

As we mark International Women’s Day, let me be blunt: the financial security of women approaching retirement today is in crisis. The numbers don’t lie. The average super balance for women aged 55-64 is $246,300, compared to $326,200 for men of the same age, according to the ABS Household Income and Wealth Survey (2019-20).

Nearly two-thirds of women believe they won’t achieve a comfortable retirement, according to the Brighter Super & Investment Trends Report (2024), and they’re not wrong to worry. The average woman expects to fall short of what she needs to live comfortably by about $1500 per month.

With less money comes fear, pessimism, and disengagement from her super. I see it all the time – women who don’t even want to check their balances because they already know the numbers won’t be in their favour. Then, because they don’t look, they don’t do anything to improve it. It’s a dead spiral we need to stop.

The gender pay gap might be real, but you don’t have to let it define your retirement.

We must acknowledge three key problems if we want women to have fairer super balances at retirement – and if we want to fix things for the next generation of women – those who haven’t reached retirement yet. If that’s you – stand back and take notice.

The first is that the gender pay gap is alive and well. In 2025, Australian women are still earning, on average, $28,425 less than men per year. That’s 78¢ for every dollar a man earns. And when you break it down, about one-third of the pay gap comes from incentives, bonuses, and superannuation contributions – which companies are still getting away with not offering fairly.

The second is that women spend fewer years in full-time work. Many of us take on caregiving roles – stepping out of the workforce for months or even years to raise children, and later, to care for ageing relatives.

I know I did – and working part-time or not at all for years has certainly affected my super significantly. What no one tells us is that every time we do, we sacrifice super contributions, career momentum, and financial security.

And thirdly, women leave the workforce earlier too.

This article continues — Read on, in The Age, The Sydney Morning Herald, Brisbane Times and WA Today.

How to get the right financial advice for you

An Epic Retirement community member reached out last week with a frustrating experience about getting financial advice. They were referred to an adviser for guidance on preparing for retirement and had a great first meeting. Everything seemed promising—until they received a 70-page Statement of Advice that lacked a clear retirement strategy or any meaningful projections. Instead, the main recommendation was to roll their high-performing super fund into a wrap platform—a move that hadn’t even been discussed in their initial meeting. They were disappointed, especially since they were with one of Australia’s top-ranked super funds and had no plans to leave.

I wrote about it in the weekend’s Nine newspapers, and in my Epic Retirement newsletter too. But this topic deserves a more detailed conversation that you can draw some lessons from. Because I’m a big supporter of financial advice — if you get the right type of advice for your needs. But to get the right advice, you need to know the different types of advice available and ask the right questions going in.

So in this episode I sit down with David Lane, the Queensland State Manager and Senior Advisor at Ord Minnett, and one of Australia’s award-winning advisers, to demystify the financial advice market. Together we break down the different types of financial advice, explore how to ask the right questions, and talk about what a good advice relationship should look like. We also unpack the real reasons some advisors recommend wraps and platforms, and help you consider whether you need ongoing investment management at all or can seek out an adviser for one-off strategic advice instead.

LISTEN TO THIS EPISODE OF THE PODCAST HERE:

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• LISTEN ON SPOTIFY

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Last of all, if you haven’t read the book, you can order your copy from Amazon online. Or pick up a copy at your local Dymocks, or QBD stores. And if your bookstore doesn’t have it - ask them to get it in.

I have a little online store where you can purchase signed copies too.