For various reasons, it’s common to continue making super contributions even after you‘ve already started a pension with your super savings.
Perhaps you’re drawing a pension while you continue to work and make concessional contributions. Maybe you’re retired and taking advantage of the opportunity to contribute to your super until you reach 75. Or perhaps you’d like to make a downsizer contribution.
But contributing while drawing a pension raises a common question. How do you get your new contributions into your pension account? Contributions and transfers from another super account can’t be added to an existing pension, so additional steps are required.
There are two main options. You can:
- Stop your existing pension, combine the balance with your accumulated contributions and then start a new, larger pension (known as a pension refresh)
- Use your accumulated contributions to start a new pension alongside your existing account, maintaining multiple pensions.
This article covers account-based pensions. If you have a lifetime or fixed-term pension instead, read more about how these products work and why the strategies here may not apply.
Before deciding which approach to take, it may be important to consider how the process could affect the tax components of your savings.
Background
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