Q: I am looking to permanently retire soon. If I had $2 million in super on July 1 and the general balance cap was $2 million, I assume I could withdraw a tax-free retirement pension at 4 per cent of $2 million to meet compliance requirements. But assume my total super balance grew to $3 million in 12 months and that growth was all due to taxable capital gains and income. Does this mean I would need to take a pension equal to 4 per cent of $3 million in year two? Would I need to pay any tax on the $1 million increase, assuming it all represented taxable capital gains and income, even though all my super was originally in pension phase? Eric

A: With the limit on the total amount of superannuation that can be transferred into the tax-free retirement phase – known as the general transfer balance cap – set to increase to $2 million on July 1 then assuming you have nothing else in pension phase, you could put all of your $2 million accumulation benefit into an account-based pension on this date, confirms Emma Partenza, a senior superannuation advisory manager with TAG Financial Service in Melbourne.