What’s the difference between a super account and income account?
If you choose to keep your nest egg in the super environment, you can either keep it in your regular super account or transfer it to an income account as a retirement member.
After a lifetime of working to grow it, you’re probably quite familiar with your regular super account in Qantas Super.
While it’s served you well, you have a couple of options when it comes to what kind of account you want to invest your super in for your retirement.
If you choose to keep your nest egg in the super environment, you can either keep it in your regular super account or transfer it to an income account as a retirement member.
Let’s look at the differences between the two.
How your super is invested
Did you know your super can actually stay invested through your retirement, so it can keep earning for you?
However, there are a couple of different ways you can invest it, depending on whether you keep it in a super account or an income account.
In a super account:
If you keep your balance in your regular super account, you can invest it in the same range of tailored investment options you’re already familiar with.
In an income account:
If you prefer to take control of your super investments, an income account also offers the same range of tailored options you’re already familiar with from your super account.
But if you’d prefer to sit back and let your account do the heavy lifting, you can also invest through a dedicated option called Autopilot.
This will see 15% of your initial investment put in our Cash option, and 85% into our automated investment strategy, Glidepath. Glidepath adjusts where your super is invested according to your year of birth.
How your super is taxed
Once you turn 60, all withdrawals you make from your super will be tax-free.
However, you may still pay tax on your investment earnings depending on the account your super is invested in.
In a super account:
Investment earnings are taxed at 15% in a super account, at any age.
In an income account:
You won’t pay tax on investment earnings in an income account as a retirement member. This can mean better returns for retirement members with income accounts.
Tax does apply to investment earnings for transition to retirement members.
How to make withdrawals
One of the best parts of retirement is, of course, enjoying the nest egg you worked so hard to grow. There are a few different ways you can tap into your super in retirement, depending on the account it’s in.
In an income account:
An income account is designed to be the next step on your super journey, which means it was made with easy withdrawals in mind. When setting up your account as a retirement member, you can choose:
- How often you want to get paid (weekly, fortnightly, monthly, quarterly, annually)
- How much to receive in each payment1; and
- Whether you want your payments to automatically increase in line with the Consumer Price Index, or inflation, each year
Payments will then be sent to your nominated bank account according to your nominated frequency.
In an income account, you can also choose your investment choice for your withdrawals, or which of your investment options your regular payments will come from.You can either choose:
- Proportionate drawdown: your payments will be drawn proportionately from each of your investment options. For example, if you have invested 75% of your balance in the Conservative option and 25% in the Cash option, 75% of your regular payment will be taken from your balance in Conservative, and 25% from your balance in Cash.
- Priority drawdown: You can choose the order in which your regular income payments are deducted from each investment option. Your payments will be drawn down from your first nominated option until there’s no remaining balance in that option, at which point your payments will then be drawn from your second nominated option
If you’ve chosen to invest via the Autopilot investment option, your payments will simply be 6% of your opening balance drawn from your investment in the Cash option.
1Minimum drawdown limits apply.
In a super account:
Because a super account is primarily designed to help members save for their retirement, making withdrawals from this type of account in Qantas Super requires a few steps. Each time you would like to make a withdrawal, you will need to fill out and send us a form detailing:
- Your personal details, including your nominated bank account
- Your proof of identity
- How much you need to withdraw
- Which of your investment options you would like your payment to be withdrawn from