Staying on top of your Pension account in retirement

27 July 2023

In the years leading up to your retirement, you may have spent a lot of time thinking about your super and planning how it would support you through retirement.

However, reaching retirement and starting a Pension account is just the start of the journey.

If you simply take a ‘set and forget’ approach to your Pension account, you may find you aren’t maximising your income throughout your retirement.

Changing circumstances can of course impact your Pension account and retirement plan. The rising cost of living and ongoing market volatility are two obvious external factors, but personal changes in your circumstances might also affect the original plan you put in place.

Deciding your income

A key factor in managing your retirement funds is deciding the amount of income you want to draw from your Pension account. Drawing the ‘right’ income is a balancing act between making sure you can sustain your retirement lifestyle and ensuring your funds go the distance.

There is also a minimum amount you must withdraw each year, which is set by the Government. That’s why it’s important to regularly review your pension payments – especially as you want to make sure you are always maximising any possible Centrelink payments and concessions.

The temporary relief on minimum drawdown rates introduced by the Government in 2020/21 came to an end on 1 July 2023, and the rates have returned to their default level. If you were taking advantage of these reduced rates, you may find that you will now be required to receive a higher pension amount every year.

It's also worth considering that your income needs may reduce as you get older. The Association of Superannuation Funds of Australia’s (ASFA) Retirement Standard, provides estimates of the annual budget needed in retirement for single people and couples aged around 65 years, and around 85 years.

As so many factors can determine your Pension account income level, you may find it worthwhile to seek financial advice either on an ongoing basis, or when you are facing a significant change in your circumstances.

Services Australia also offers free access to Financial Information Service Officers, who may be able to help you understand how your Pension account affects your Age Pension or other Centrelink benefits.

Your investment strategy

Another aspect of your Pension account that you should be reviewing on a regular basis is your investment strategy.

As with deciding your income amount, your investment strategy can also be a balancing act. You may be in retirement for two or more decades, making your Pension account a long-term investment. Your attitude to market volatility and investment risk may change over time.

Additionally, if you are invested in more than one investment option, factors such as market volatility and withdrawals from your account can mean that over time your actual investment option asset allocation can differ from your intended strategy.

To help combat this, we offer the option of automatic rebalancing for your Brighter Super Pension account, which means that at your chosen frequency we will rebalance your investment options by switching them back to the percentage options you last chose.

Please note that at the time of automatic rebalancing, funds may be transferred into an investment option that isn’t performing as well as the previous option. However, the performance of options does change over time and what has performed well in the past may not be the best performer in the future. We recommend seeking financial advice before selecting automatic rebalancing to make sure this is a suitable approach for you.

You can opt in or out of automatic rebalancing at any time via the Member Online or by completing a Pension update form available at brightersuper.com.au/forms.

Financial advice

No matter what stage of life you’re in, financial advice can help you achieve the retirement lifestyle you want.

If you already have a financial adviser, they can help you make informed decisions about your Pension account.

If you do not have a financial adviser, Brighter Super’s team of in-house financial advisers are here to help you 1. Types of financial advice include limited advice on a single issue, scaled advice for retirement planning, and comprehensive advice.

Find out more about financial advice.

Your super and your family

While it is a hard topic to think about, it is important to consider what you want to happen to the money in your Pension account after your death.

You have several options available to you, including nominating a reversionary beneficiary, which is someone who can continue to receive your pension as an income stream after your death, or making a death benefit nomination, which pays out your super as a lump sum.

Further information:

• Death benefits info sheet
• Article: Passing on your super to your loved ones
• Visit brightersuper.com/seminars for future or recorded seminars and webinars on beneficiaries, estate planning and other topics.

We’re here to help

At Brighter Super we’re right by your side throughout your superannuation journey, and that includes retirement.

For full details about your Pension account, you can refer to your Product Disclosure Statement, available at brightersuper.com.au/PDS.

To discuss your Pension account further, you should contact either your own financial adviser or call us direct on 1800 444 396. Our team of financial advisers and superannuation specialists are here to help you.