Take the retirement quiz

Incorrect! This is false. ABPs commenced after January 2015 are counted as a financial asset and included in deeming calculations for income test purposes. Payments and withdrawals are ignored.

Incorrect, this is true. Deprivation rules mean that your assets will reduce by is $10,000 and under the asset test, this would result in an additional $30 per fortnight from Centrelink. You have lost the benefit of the money and the income that might have been generated by the $200,000.

Incorrect. This is true. Your primary dwelling when used for private purposes is specifically exempt from means testing and there are no rules that prevent you from spending your money any way you like.

Incorrect. This is false. While Centrelink have the power to investigate, their systems are not linked into the financial institutions. They cannot access bank accounts or your investments. Therefore, you must tell them of a change in circumstances within 14 days.

Incorrect, this is false. Each Age pensioner has a working bonus credit which accumulates at $300 a fortnight to a maximum of $7,800 per year. Added to this is a $4,000 bonus. This means you could earn $11,800 before you would lose any pension. You must still however, notify Centrelink of the payment.

Incorrect, this is true. The over 67 work test requires you to work 40 hours in a 30-day period for gain or reward. The rules do not stipulate how you are paid or at what rate.

Incorrect! This is true. Superannuation Guarantee payments are sometimes not payable for domestic arrangements of 30 hours a week or less. As you work 35 hours or week, 11 percent SGC super should be paid.

Incorrect. This is true. Assuming no previous contributions to super and an account balance of less than $500,000. Each person could make use of super downsizer $300,000, bring forward of non-concessional contributions of $330,000 and carry-forward concessional contributions of $132,500.

Correct! This is false. Concessional contributions are subject to a minimum contributions tax of 15 percent. Non senior Australian residents earning less than $21,884 pay no tax or Medicare, thanks to tax offsets. Therefore, salary sacrificing below this level means you are paying 15 percent tax when you don’t need to.

Incorrect, this is false. You may be able to make use of spouse-splitting rules which allow you to transfer 85 percent of the previous year’s concessional contribution to your partner’s super.

Incorrect, this is true. If diagnosed with a terminal illness with death likely to occur within 24 months, most insurers will pay the death benefit to the super fund when the evidence is provided.

Correct! This is false. If the fund is found to be non compliant, the Commissioner can impose tax up to the maximum marginal tax rate of 45 per cent. This applies not only to the earnings but to the total assets of the fund.

Incorrect, this is true. An 18 per cent spouse contribution offset is available for contributions of up to $3,000 paid to a spouse’s super account. Adjusted taxable income of the spouse must be less than $37,000. The maximum rebate is up to $540.

Incorrect, this is false. The co-contribution only applies to non concessional or after-tax contributions to super. Salary sacrifice contributions are concessional contributions and therefore are ineligible.

Incorrect, this is true. The compulsory cashing rules changed in 2006 and the money can be left in accumulation phase for as long as you like.

Correct! This is false. In order to start an account-based pension (ABP), the money must come via a superannuation fund. Your ability to start an ABP will depend on your ability to contribute to super. You will need to satisfy the contribution rules with respect to age and contribution caps.

Incorrect. This is true. Unless it is an ABP that was commenced prior to January 2015 and you were on a Centrelink pension at that time, the money in an ABP is now counted as a financial asset. Whether in super, the bank or in an investment portfolio, the grand total of financial assets is caught in the means testing system under the asset and income test.

Incorrect. True. While most of us focus on the early withdrawal rates of around 5 per cent at 65, the minimums increase in bands. Self-managed super fund (SMSF) operators need to ensure that they have the liquidity to meet their minimum payment obligations at all stages of life.

Correct! This is false. Super funds including ABPs do not normally form part of your estate unless you direct so via ideally, a non-lapsing binding death nomination (BDN). If you do not have a BDN, the trustees of the super fund are legally obliged to pay the proceeds to those classified as your interdependents. To ensure your wishes are followed, complete a BDN nominating your estate as beneficiary,

Incorrect! False. Once the money is in the superannuation system, all or part of it is completely interchangeable between accumulation and retirement (pension) phase at any time. To lower the payments, you could roll some of the ABP back to accumulation phase.

Incorrect. False. The main determinant of investment returns is asset allocation. Diversified funds such as a balanced fund all have different asset allocations. There is no rule that stipulates the allocation between shares, property and deposits for different labels. Understand the mix of your fund and then decide whether you want to make changes that might improve the performance within your existing fund

Incorrect. False. The share price has no relationship to returns. It is the underlying assets of the company and number of shares on issue. Commonwealth Bank, for example, could hand out a nine-for-one free share issue. That would have Commonwealth Bank shares list the following day at around $10.60 a share instead of $106.

Incorrect. True. Under the Federal Government’s Financial Claims Scheme, deposits of up to $250,000 per account holder per authorised deposit-taking institution (ADI) are guaranteed. All Australian credit unions are ADIs.

Incorrect. False. The dividends will almost certainly have franking or imputation credits valued at more than $8,500 that can be used to reduce other tax liabilities or refunded. In effect, this is an additional 1.7 per cent in returns. The rent will be reduced by the costs associated with ownership such as insurance, rates and other charges. These will vary but will likely reduce the returns by about 0.8 per cent.

Incorrect. True. Distributions whether physically received or reinvested may still give rise to a tax liability. The distributions can include dividends with tax credits and capital gains generated by the buying and selling of shares by the fund manager.

Incorrect. True. Provided the advice was negligent or the investment did not match your stated circumstances or the risks were not adequately explained or the representations about the investment was false. All AFSLs must be part of a free complaint resolution scheme and have professional indemnity insurance cover. If you send your money off-shore or deal with a firm not in Australia, you have none of these protections.

Incorrect. This is true. Because your primary dwelling is exempt from capital gains tax, many retire and downsize to release funds in the family home. Nonetheless, be aware that in some cases, down-sizing does not mean you will have to pay less for a smaller home. Change over costs can be considerable.

Incorrect! False. If you wish, you can have a superannuation fund that invests in just bank accounts or term deposits. The underlying asset allocation is what determines investment risk and if your fund does not offer the bank account option, you can move the funds to a manager that does. The primary risk of super is that the rules might change.

Incorrect. True, most of the time. Bonds can be bought and sold on the open market and if rates rise or look likely to rise, the capital value of some bonds can decline. The reverse applies if rates appear likely to fall.