Opportunities that are NOT for Millennials

The younger generations seem to grab the attention but why should they get it all? Some opportunities are reserved for people with more years under their belt.

By Adam Krull - 3 min 40 secs read

A little about Adam

For nearly five years, Adam has been helping members of the Russell Investments Master Trust prepare for their retirement with confidence and peace of mind. With a career focussing on corporate super, finance and insurance, he offers clarity and support in the form of general information, so members can understand their options for a great life after work.

With their side hustles and their social media savvy, Millennials do grab the attention, but there are certain financial opportunities that are not available to younger people—and they go way beyond discounted public transport fares and other concession-related benefits.   

Some of these opportunities are timeless, but there are a few new ones that come into play from 1 July 2022. Here’s a list of super strategies that are firmly for the older generations: Millennials need not apply.

1. Super pensions 

While superannuation offers a tax-effective way for everyone to save—Millennials included—when you reach your more mature years you can step up the advantages by switching your accumulation account to a super pension.   

Only available to those who have reached preservation age (which is when you can access your super), super pensions allow you to draw your hard-saved money out of your super account. Also called account-based pensions or allocated pensions, this is separate from any government Age Pension you may be entitled to.   

You can set your super pension payments to drop into your bank account on a monthly basis just like a pay cheque—without working the hours for the income. You can also change the amount you receive and even take out lump sums if you wish.   

Best of all, once you reach preservation age, you will not pay tax on money you take out of your super pension account.

A tax-free, work-free income? That’s something Millennials can only dream about!

Inside a super pension account, your money continues to be invested and you can pick and change your investment options to match your preferences. Additionally, there is no tax to pay on investment returns inside a super pension account, whereas investment returns in a super accumulation account are taxed at up to 15 per cent.

2. Lower drawdowns  

In response to the COVID-19 pandemic and to support retirees drawing a super pension, the Australian government temporarily halved the minimum drawdown proportion from its normal amount. (Since Millennials can’t get pensions, this doesn’t affect them.)   

As you may know, when starting a super pension, you have to commit to drawing a minimum proportion of your account balance out of your account every year. The amount depends on your age.   

This measure allowed retirees on super pensions to leave more money invested when they may have been spending less during lockdowns or reluctant to withdraw as much when volatile investment markets would have reduced account balances.   

For more on super pensions and minimum drawdown rates, read John Wasiliev’s article on tidying up your retirement income.   

3. Downsizer contributions  

Younger people can add up to $27,500 before-tax and $110,000 after-tax each year to their super account. But if you are aged 65 and over, you can also add up to $300,000 from the proceeds of the sale of your home into your super account. Starting from 1 July 2022, this perk will be extended to people aged 60 and over (with a proposal to lower it further to age 55)—the younger Baby Boomers.  

Many Millennials are still striving to get onto the property ladder and part of the aim of this policy is to help free up housing to allow that. But it doesn’t change the fact that a larger group of people in the older generations will benefit from being able to move more money into super, boosting the amount of savings they can hold in the tax-advantaged environment.   

4. No more work test  

Another super sweetener for people aged 67 to 74 that comes in from 1 July 2022 is the abolition of the work test for making personal super contributions and salary sacrificed contributions.   

Up until that date, people in that age bracket could only add to their super account if they worked at least 40 hours over a 30-day period. From the start of the new financial year, people aged under 75 will no longer need to pass that work test to contribute.

From 1 July 2022, rules allowing people to bring forward three years’ worth of after-tax contributions into a single year are also being extended to people aged under 75, from an upper age limit of 67 in previous years.   

Available to all  

The strategies above only apply to those more advanced in years, but don’t forget there are other ways to maximise your super and retirement income that are available to everyone, such as making before-tax and after-tax contributions to your super account when you can.   

Government Age Pensions, available to eligible people aged 66.5 years and over, can also be used in conjunction with a super pension.   

It’s also important to note that rules relating to super are updated regularly under every government, plus each person’s situation is different.   

To find out more about these and other opportunities available to you in retirement, register to attend our masterclass ‘Supercharge your income: smart strategies in retirement’ on 21 June 2022.   


Issued by Total Risk Management Pty Ltd ABN 62 008 644 353, AFSL 238790 (TRM) as the trustee of the Russell Investments Master Trust ABN 89 384 753 567. Resource Super and Nationwide Super are divisions of the Russell Investments Master Trust. This document provides general information only and has not been prepared having regard to your specific objectives, financial situation or needs. Before making an investment decision, you need to consider whether this information is appropriate to your objectives, financial situation and needs. The information has been compiled from sources considered to be reliable, but is not guaranteed. Any examples have been included for illustrative purposes only and should not be relied upon for the purpose of making an investment decision. Past performance is not a reliable indicator of future performance. The Product Disclosure Statement (PDS) can be obtained by phoning 1800 555 667 or by visiting russellinvestments.com.au or for Nationwide Super by phoning 1800 025 241 or visiting nationwidesuper.com.au. Any potential investor should consider the latest PDS in deciding whether to acquire, or to continue to hold, an investment in any Russell Investments product. The Target Market Determinations for the Russell Investments Master Trust are available on our website. The Financial Services Guide for the Russell Investments Master Trust is available on our website or on the Nationwide Super website.   

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