If you want to pass your super on to any non-dependents (like your adult children) they’ll usually have to pay tax on this component – which could be anywhere from 17 – 30%.
The good news is that you can reduce this taxable component, which means more money for your loved ones. If you meet the withdrawal conditions, you can withdraw money from you super as a tax-free lump sum. You can then redeposit it into your super as a non-concessional (after-tax) contribution. This will put your money into the tax-free component and maximise the money they will receive.
You can do this even if you’re fully retired, as thanks to the removal of the work test last year, anyone with less than $1.9m in all super and pension accounts can still contribute to super.