Ask an Adviser

Category » Retirement

There were 16 articles found in this category:

• Q1 What is a super income stream?

  Super income stream funds, which are also referred to as Allocated Pensions or Account Based Pensions, allocate members’ money into their own investment account with the fund: They provide regular income for as long as there is sufficient money in the account. While you are drawing on you ... Read more

• Q2 What is Transition to Retirement (TTR)?

  In summary, superannuation fund members who have reached the Preservation Age (currently 55 years and over) have the opportunity to continue participating in the work force and adding to their super, while drawing some of it as a non-commutable super income stream. Non-commutable means they cann ... Read more

• Q3 What is the minimum level of income I must draw from my retirement income stream?

  The minimum level of income that you can draw from a retirement income stream is dependent upon your age, and whether any additional initiatives such as the temporary drawdown relief provisions apply. These limits are illustrated in the table below. Age of beneficiary Minimum percentage (norm ... Read more

• Q4 Do I choose a lump sum or a pension, and what about taxes?

  Choosing a lump sum or pension is very much an individual choice. Many people will withdraw some money as a lump sum from super to repay debt or undertake capital expenditure (often home renovations, new car, overseas holiday). The balance may be best left invested in super or converted to an in ... Read more

• Q5 How will my expenses change during retirement assuming I’ve paid off my mortgage?

  You may spend less on: transport costs to and from work work-related expenses eg. clothing and bought lunches food and utilities as dependents move out home loan repayments You may spend the same on: personal care entertainment You may spend more on: health and dental care ... Read more

• Q6 What is a Term Certain or Lifetime annuity?

  An annuity is simply an investment that gives you a regular payment over a specified term. The annuity term can be for your lifetime, or for a specified number of years. If, when you die, the amount paid to you as income from an annuity is less than the amount you invested, generally the balance ... Read more

• Q7 What is a deductible amount?

  A deductible amount is a term used in relation to retirement income streams to reflect what is considered to be the return of your capital over time. This is particularly relevant for Centrelink purposes, as the gross income that you receive from a retirement income stream is reduced by the ded ... Read more

• Q8 Is there a maximum annual income limit for a Transition to Retirement (TTR)?

  Yes, a maximum annual income limit does apply to super income stream accounts operating under TTR provisions. The maximum is 10% of your annual account balance, until you attain age 65. Read more

• Q9 I have just turned 55. Can I claim my super as a lump sum?

  The provisions that apply to accessing superannuation as a lump sum payment vary, depending on your age. Since you have attained preservation age but have not yet reached 60 years of age, you can only claim a lump sum if you retire permanently from the workforce. Read more

• Q10 What pensions are available to me?

  The minimum standards for pensions are as follows: Payments of a minimum amount to be made at least annually, allowing pensioners to take out as much as they wish above the minimum (including cashing out the whole amount). The pension can be transferred only on the death of the pensioner to ... Read more

• Q11 Can I use the Transition-to-Retirement rule?

  If you are at least 55 you may be able to utilise a ‘Transition to Retirement’ pension. Transition-to-Retirement pensions will allow no more than 10 per cent of the account balance (at the start of each year) to be withdrawn in any one year. Read more

• Q12 Can I turn my pension into a lump sum?

  For most account-based pensions the answer is yes. You may decide you no longer want to wait to access your super through regular payments over a period of years and would rather do other things with it or invest it yourself now. See your super fund for details or speak to a Financial Planner. Read more

• Q13 How are super pensions taxed?

  Anyone who has reached 60 and retired will pay no tax on income streams. The only exceptions are some retired public servants who receive benefits from untaxed funds. Pensions paid from taxed funds to those aged over 60 will also not be counted as part of a pensioner’s taxable income. This ... Read more

• Q14 What are the tax benefits of a TTR?

  A TTR strategy allows individuals who have reached preservation age (currently age 55) to access some of their superannuation benefits. As well as providing an opportunity to move to part time work and/or the opportunity to save extra funds to your superannuation, a TTR strategy can provide the ... Read more

• Q15 How much income will I need?

  There are many opinions about what is a reasonable and achievable level of retirement income. Essentially, this is an area where individual circumstances and expectations play a big part. One guide that provides a useful reference is the Westpac/Australian Superannuation Funds Association (ASFA) ... Read more

• Q16 How many years of retirement can I expect?

  Actuaries (financial specialists who calculate statistical probabilities based on facts and trends), have noted that growth in life expectancy in Australia has been increasing steadily for some time. Governments rely on actuarial calculations for planning purposes and, from time-to-time, they pu ... Read more