One of the most common questions high-net-worth individuals ask is how to structure superannuation and overall wealth effectively in retirement. With significant assets, the opportunities available in retirement are substantial but so are the complexities around tax, income sustainability, and long-term wealth preservation.
For most retirees, holding as much of their wealth as possible within superannuation remains a cornerstone strategy due to its concessional tax treatment. However, for individuals with large balances, additional investment structures such as family trusts and companies often play a critical role in optimising outcomes.
Effective retirement planning is not just about maximising wealth it’s about ensuring certainty, flexibility, and confidence throughout retirement.
Why Is a Retirement Plan Essential?
A comprehensive retirement plan provides clarity around your financial future and ensures your wealth is structured to support your desired lifestyle. It defines your income objectives and establishes a framework to achieve them in a tax-efficient manner.
A robust retirement strategy should address:
- How much of your superannuation can be transferred into a tax-free pension account
- How to manage funds remaining in accumulation phase to minimise tax while maintaining growth
- A sustainable income drawdown strategy aligned with your lifestyle goals
- The use of non-super investment structures, such as family trusts or companies, to manage tax and distribute income to beneficiaries
- Long-term financial security, including succession planning and wealth preservation
Beyond the numbers, retirement planning helps answer critical lifestyle questions when you’ll retire, whether you’ll transition into part-time work, and how you’ll spend your time and money. For many high-net-worth retirees, this includes international travel, premium lifestyle expenses, luxury assets, and supporting children or grandchildren financially.
How Much Super Can Be Transferred to a Tax-Free Pension?
Once you retire after age 60, you may commence an account-based pension from your superannuation. If you continue working, pensions can be commenced from age 65, or earlier via a Transition to Retirement (TTR) pension.
The Transfer Balance Cap limits how much superannuation can be moved into the tax-free pension phase. As at 1 July 2025, this cap is $2 million per individual.
Example: $4 Million Superannuation Balance
- $2 million can be transferred into a tax-free retirement pension
- The remaining $2 million stays in accumulation phase, where earnings are taxed at up to 15%
This structure allows you to maximise tax-free income while keeping excess funds invested in a concessionally taxed environment.
How Much Income Must You Draw from Your Pension?
Once in pension phase, minimum annual withdrawals apply:
- 4% of the account balance from age 60
- 5% from age 65
For a $2 million pension account, a 60-year-old retiree must withdraw at least $80,000 per year, completely tax-free.
While higher withdrawals are permitted, it is often more tax-effective to:
- First draw income from assets outside super
- Then from accumulation phase
- Finally, draw additional funds from the pension account
In some cases, delaying the commencement of a pension may be advantageous—particularly if you are already paying the highest marginal tax rate and do not require immediate income. Keeping funds in superannuation without mandatory withdrawals can preserve long-term tax efficiency.
Can You Still Contribute to Superannuation?
Depending on your circumstances, additional super contributions may still be available:
Concessional Contributions
- Up to $30,000 per year
- Tax deductible if income supports it
- From ages 67–74, a work test applies
Non-Concessional Contributions
- Up to $120,000 per year
- Available up to age 74
- Only permitted if your total super balance is below $2 million
Downsizer Contributions
Even if you’re over 74 or exceed the $2 million cap, you may still qualify for a downsizer contribution:
- Up to $300,000 per person
- Must be over 55
- Property must have been owned for at least 10 years
- Must have been your principal residence at some point
- Contribution must be made within 90 days of settlement
What If You Can’t Contribute Any More to Super?
When further super contributions are no longer possible, a family trust can be an effective alternative for managing and growing wealth.
A family trust allows income to be distributed among beneficiaries often family members—based on tax efficiency and the trust deed. This flexibility can significantly reduce overall tax payable.
In some cases, appointing a company as a beneficiary can further enhance outcomes, with company tax rates capped at 30%, compared to the top marginal rate of 47%. However, when funds are later withdrawn from the company, additional tax may apply.
Trust structures can also play a vital role in wealth succession planning, offering flexibility and control across generations.
How Do You Manage Wealth Succession and Estate Planning?
High-net-worth retirees often have complex estates, making succession planning essential.
Key considerations include:
- Up-to-date wills and estate planning documents
- Appropriate superannuation beneficiary nominations
- Future trustee and executor arrangements
- Tax-effective strategies for transferring wealth
Legal and tax advice is critical to ensure your wealth is passed on according to your wishes and in the most efficient manner.
Equally important is preparing the next generation. Open conversations about wealth, responsibility, and long-term planning can help ensure your legacy is preserved and managed wisely. These discussions take time, making early engagement invaluable.
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How can we help?
If you have any questions or would like further information, please feel free to give our office on 08 9221 5522 or via email – info@camdenprofessionals.com.au or arrange a time for a meeting so we can discuss your requirements in more detail.
General Advice Warning
The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this page and on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs.
Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this page and on this website are for illustrative purposes only.
Although every effort has been made to verify the accuracy of the information contained on this page and on this website, Camden Professionals, its officers, representatives, employees, and agents disclaim all liability [except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.
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