Tax · Caloundra & the Sunshine Coast
Tax in retirement: advice for Caloundra and the Sunshine Coast
Tax in retirement depends on where your income comes from. Generally, super payments after 60 from a taxed fund are tax-free (limits and conditions apply), and the seniors and pensioners tax offset (SAPTO) can reduce tax for eligible pensioners. Simon looks at all of these together. We work with people in Caloundra, Mooloolaba and across the Sunshine Coast.
Book a 30-minute Fit Check with Simon
Why plan for tax in retirement?
Once you stop working, where your income comes from changes: super, the Age Pension, investments, perhaps some part-time work. Each is taxed differently. Planning for tax in retirement means looking at them together, so you can see what you’re likely to keep after tax and make choices with the full picture.
Simon lives in Caloundra and works with retirees and pre-retirees across the Sunshine Coast. We work with people in Caloundra, Mooloolaba and across the Sunshine Coast.
“…explaining things in a way I understand and allows me time to process information and make informed choices”
Nicole, Jan 2026Selected reviews. Individual experiences vary.
How can super contributions help before you retire?
For 2026–27, you can generally contribute up to $32,500 a year into super as concessional (before-tax) contributions, such as salary sacrifice or personal contributions you claim a deduction for. These are generally taxed at 15% in the fund. The non-concessional (after-tax) cap is $130,000 for 2026–27. [1] Other limits and conditions apply, so Simon checks what fits your situation.
If you sell your home, you may also be able to make a downsizer contribution: see our pre-retirement planning page.
How is super taxed in retirement?
Generally, payments from a taxed super fund to someone aged 60 or over are tax-free. [2] Investment earnings in the retirement phase are generally tax-free too, but a limit applies to how much you can move into the retirement phase: the general transfer balance cap is $2.1 million for 2026–27. [3] How these rules apply depends on your circumstances. More on our superannuation advice page.
What is SAPTO, and who is eligible?
The seniors and pensioners tax offset (SAPTO) can reduce the tax you pay. To be eligible, you must be eligible for an Australian Government pension or allowance and meet income limits for you and your spouse. For 2025–26, the maximum offset is $2,230 for a single person and $1,602 for each partner of a couple, and it reduces as your rebate income rises. [4]
Simon looks at how SAPTO, the Age Pension and your super income fit together.
What tax applies to super left to adult children?
Australia has no inheritance tax, but super paid to someone who isn’t a dependant for tax purposes, such as many adult children, can be taxed.
How a super death benefit is taxed depends on who receives it, and on the parts that make up your super. [7][8]
Who is a dependant for tax?
For tax purposes, a dependant of the person who died is generally:
- a spouse or de facto spouse, including a former spouse
- a child under 18
- someone in an interdependency relationship with them
- anyone else who was financially dependent on them.
[7]
Why adult children usually aren’t
Children aged 18 or over only count as dependants for tax if they were financially dependent on the person who died. Many adult children who work and support themselves are not. [7]
Someone who isn’t a dependant can only receive a death benefit as a lump sum, not as an income stream. [7]
Tax on a death benefit lump sum paid to a non-dependant
A death benefit lump sum paid to a dependant isn’t taxed. The Medicare levy is 2%. Your super fund can tell you how much of your super is in each component. [2][5][8]
Example only: illustrative, not a prediction
An adult child who isn’t a dependant for tax receives, directly from the fund, a death benefit lump sum that is all taxable component (taxed element), $500,000 with no tax-free component or untaxed element. Tax on that part could be up to 15% plus the 2% Medicare levy, or up to $85,000.
This is a simplified illustration, not a prediction for your family. It assumes the full 2% Medicare levy applies and the maximum rate is reached. The actual tax depends on the components, how the benefit is paid and the recipient’s circumstances.
What’s worth reviewing with an adviser?
Who you’ve nominated
If your fund allows it, a binding nomination can direct your death benefit to one or more dependants or to your legal personal representative (the executor of your estate). With a non-binding nomination or none, the trustee may decide. [7]
Direct or through your estate
Super can be paid straight to a beneficiary or to your estate, where it’s shared under your will. The path can affect who receives it and when. Simon can talk through how each path is treated for your family. Simon works with your solicitor on this. Binding nominations and your will are legal documents, so your solicitor advises on those. Super paid through your estate to someone who isn’t a dependant is still taxed. The Medicare levy treatment can differ, which your solicitor and accountant can confirm.
Timing and components
The mix of tax-free and taxable components in your super matters. Some people look at withdrawing and re-contributing super, but it has limits and trade-offs: contribution caps, age and eligibility rules (including bring-forward rules), costs, and possible effects on the Age Pension and other entitlements. It doesn’t suit everyone and needs personal advice. Simon can talk this through with you. [1]
This is general information, not personal advice. Rules and your circumstances can change, so it’s worth reviewing these with your fund and an adviser. Family are welcome to join the conversation.
How do we work with your accountant?
Simon gives tax (financial) advice: how your super, investments and retirement income are set up over the years ahead. We don’t prepare or lodge tax returns. With your permission, Simon works with your accountant or registered tax agent so the plan and your tax returns line up.
It starts with a 30-minute Fit Check. It’s general information, not personal advice. See Pricing, Our engagement process and our Path to Prosperity approach. For large balances, read about Division 296.
Common questions about tax in retirement
What is SAPTO?
The seniors and pensioners tax offset (SAPTO) can reduce the tax you pay if you’re eligible for an Australian Government pension or allowance, such as the Age Pension, and your income is under the limits. For 2025–26, the maximum offset is $2,230 for a single person and $1,602 for each partner of a couple.
Who is eligible for SAPTO?
To be eligible, you must be eligible for an Australian Government pension or allowance and meet income limits for you and your spouse. The ATO works out the offset from your tax return, and the amount reduces as your rebate income rises above the shading-out threshold.
How is super taxed in retirement?
Generally, payments from a taxed super fund to someone aged 60 or over are tax-free, and investment earnings in the retirement phase are generally tax-free too. A limit applies to how much you can move into the retirement phase: the general transfer balance cap is $2.1 million for 2026–27.
Do you prepare tax returns?
No. Simon gives tax (financial) advice about how your super, investments and retirement income are set up. We don’t prepare or lodge tax returns. With your permission, Simon works with your accountant or registered tax agent.
Are advice fees tax deductible?
It depends on what the advice covers and your circumstances. Generally, advice fees are only deductible in limited cases, such as ongoing advice about income-producing investments, or the part of a fee that relates to managing your tax affairs when the advice comes from a registered tax agent or a qualified tax relevant provider. You must pay the fee yourself: fees paid from your super balance can’t be claimed. This is general information only. Your registered tax agent can confirm how it applies to you. We provide itemised invoices to make that easier.
Do adult children pay tax on super they inherit?
They can. Australia has no inheritance tax, but children aged 18 or over are usually not dependants for tax unless they were financially dependent on the person who died. A death benefit lump sum paid to a non-dependant is taxed at up to 15% plus the Medicare levy on the taxed element, and up to 30% plus the Medicare levy on any untaxed element. The tax-free component isn’t taxed.
Want to talk through tax in retirement?
Start with a 30-minute Fit Check with Simon, Founder and Lead Retirement Planner, by phone or video call.
Book a 30-minute Fit Check with Simon
Or call Simon on (07) 5327 3495
Sunlit Path Retirement Partners is a trading name of The Trustee for Mino Family Trust, ABN 16 788 964 101.
Sources
- [1] ATO – Contributions caps (concessional cap $32,500 and non-concessional cap $130,000 for 2026–27; page last updated 11 September 2026) – https://www.ato.gov.au/tax-rates-and-codes/key-superannuation-rates-and-thresholds/contributions-caps – checked 17 October 2026.
- [2] ATO – Payments from super (preservation age table; super lump sum tax table: death benefits paid to non-dependants, taxable component – taxed element maximum 15% and untaxed element maximum 30%, excluding Medicare levy; paid to dependants nil; Medicare levy 2%; page last updated 16 September 2026) – checked 21 October 2026.
- [3] ATO – Transfer balance cap (general transfer balance cap $2.1 million for 2026–27; page last updated 27 April 2026) – https://www.ato.gov.au/tax-rates-and-codes/key-superannuation-rates-and-thresholds/transfer-balance-cap – checked 17 October 2026.
- [4] ATO – Seniors and pensioners tax offset (eligibility; 2025–26 maximum offset $2,230 single and $1,602 each partner of a couple; page last updated 2 October 2026) – https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/tax-offsets/seniors-and-pensioners-tax-offset – checked 17 October 2026.
- [5] ATO – Taxation of super benefits (Medicare levy of 2% applies where the rate of tax is greater than 0%; page last updated 17 December 2025) – https://www.ato.gov.au/tax-and-super-professionals/for-superannuation-professionals/apra-regulated-funds/managing-member-benefits/taxation-of-member-super-benefits/taxation-of-super-benefits – checked 21 October 2026.
- [6] ATO – Financial advice fees (last updated 8 June 2026) – https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/investments-insurance-and-super/financial-advice-fees – checked 17 October 2026.
- [7] ATO – Superannuation death benefits (binding and non-binding nominations; non-dependants must be paid a lump sum; who is a dependant under tax law; children over 18 must be financially dependent; page last updated 10 July 2026) – checked 21 October 2026.
- [8] ATO – Tax on super benefits (tax-free and taxable components; tax on super death benefits: taxed element maximum 15% plus Medicare levy, untaxed element maximum 30% plus Medicare levy; dependants pay no tax on a lump sum; page last updated 2 August 2023) – checked 21 October 2026.