Clients: Peter (66) and Bron (63)
Adviser: Erica Cummins, Principal Adviser
Stage: Transitioning into retirement
When Bron retired 12 months ago, she commenced an account-based pension and began the shift into retirement life. Peter’s retirement followed a little later, finishing work in January 2026 after taking long service leave.
When they first met with Erica Cummins, Principal Adviser, their main concern wasn’t tax. It was whether they had enough to live the retirement they actually wanted.
They had previously been working toward an income target of around $70,000 per year. But once Erica unpacked what retirement really looked like for them – travel, time with family, flexibility to enjoy new grandchildren – it was clear that number was too conservative. Realistically, they needed closer to $90,000 per year.
After running detailed projections, Erica was able to show they could sustainably draw around $100,000 per year throughout retirement, beyond life expectancy assumptions.
That result alone changed their confidence completely.
Where they started
Peter had two defined benefit interests.
The first was an older Aware account valued at $220,000, with 93% taxable component. It offered two options – lump sum only, or lump sum plus a lifetime pension. Interestingly, the lifetime pension option also provided the higher lump sum, so that decision was straightforward.
The second defined benefit account was a lump sum only option valued at $762,057, and was 100% taxable component.
Bron had an account-based pension valued at $443,198, with roughly 90% taxable component.
Across the board, most of their super sat in the taxable component.
While super is primarily there to fund retirement, Peter and Bron were also conscious that whatever remained would likely pass to their two adult daughters. Because adult children are considered non-tax dependants, taxable super benefits can attract death benefit tax.
It wasn’t their main concern – but it was something worth addressing if the opportunity presented itself.
The opportunity
As Peter transitioned his defined benefit interests and new pensions were being established, funds were already moving. That created the ideal window to implement a recontribution strategy.
Erica structured the strategy across two financial years:
- $120,000 recontributed in June
• $360,000 recontributed in July using the bring-forward provisions
This allowed a total of $480,000 to be moved from taxable to tax-free component.
For Bron, this effectively converted her account-based pension to entirely tax-free component.
For Peter, Erica established two new account-based pensions. One of $480,000 sits almost entirely in tax-free component. This account has been quarantined, with only the minimum pension drawn. His remaining benefits sit in a second, largely taxable pension, which will be used to fund their lifestyle income and any lump sum needs.
By structuring it this way, they are deliberately drawing down the taxable component first while preserving the tax-free component for as long as possible. It improves estate outcomes and strengthens long-term flexibility.
In the 2029–30 financial year, once the bring-forward period ends, Erica will review the strategy again and consider a second recontribution for the remaining taxable balance.
Addressing the “Is this allowed?” question
A common question Erica receives about recontribution strategies is whether they’re really legitimate. Some clients see it as a loophole.
As Erica explains, there’s no immediate tax benefit to the member under current rules. The strategy doesn’t reduce their tax today. What it does is change the composition of their super for the future.
She often reminds clients that while death benefits paid to a spouse are tax-free, leaving recontribution until after the first death can significantly reduce flexibility. Contribution caps may limit what can be done, and once someone is over 75, further contributions are generally not permitted. At that point, assets may need to move outside super, potentially exposing earnings to income tax.
By acting at retirement – when funds were already being restructured – Peter and Bron were able to implement the strategy efficiently and proactively.
The result
The biggest win for Peter and Bron wasn’t the tax saving.
It was the confidence around their income.
Seeing clearly that they could draw $100,000 per year and maintain that beyond life expectancy gave them permission to enjoy retirement properly. Travel, family, flexibility – without second-guessing every decision.
The recontribution strategy delivered a secondary but meaningful outcome: an estimated $131,560 in potential death benefit tax avoided, meaning more of their wealth remains with their daughters.
In their words:
“We have found the entire process of working collaboratively with you, along with your ongoing guidance and planning for our retirement, to be nothing short of outstanding.
Your clarity and transparency have enabled us to make informed decisions. We are particularly grateful for being made aware of the recontribution strategy and the benefits it will have for us and our family in the future.
With regular reviews of our plan, we are confident in the process to meet our future needs and objectives.”
The takeaway
As Erica notes, retirement planning isn’t just about investment returns. It’s about structure and timing.
The transition from work to retirement is a key planning window. When funds are already moving from accumulation to pension phase, small structural decisions can have a significant long-term impact – on income, flexibility and estate outcomes.
For Peter and Bron, that meant more income than expected, greater peace of mind, and a more tax-effective legacy for their daughters.
And that’s what good retirement planning should do.