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Retirement and Pensions

Financial planning concepts

This document contains factual and general information only to assist you in understanding
financial planning concepts. It is designed to be used in conjunction with a Statement of Advice

So you have worked hard all your life, now it’s time to slow down and enjoy
your lifestyle, full time!
In retirement there are a number of different products and strategies that
can be utilised to help make your money last longer. These may be used in
addition to any Government Age Pension entitlements that maybe available.

  • Flexible pension payments 

  • Balance is assessed under the Income and Asset Test for
    Centrelink benefits

  • Rate of return based on investment options chosen within
    the pension

  • From age 60 no tax on returns or payments

  • Between preservation age and 60, a 15% tax offset is
    available on taxable pension payments

  • Payments last only as long as there is money in the
    pension

  • Ability to withdraw lump sums at anytime

  • If you pass away remaining balance passes to your estate
    or reversionary beneficiary

  • Must take at least the minimum amount based on age

Account Based Pension

How it works

An ‘account based pension’ account is set up with your
superannuation funds and you receive regular income
payments from the pension account. You are able to
choose from a range of investments like managed funds,
shares, term deposits.​

The Rules

A minimum payment must be made to you at leastannually. You can receive a regular income at intervalsof your choice (fortnightly, monthly, quarterly, six monthly or annually) depending on the provider.The amount of the minimum annual payment dependson your age and the size of your account. It is set as apercentage of your account balance on the 1st July eachyear, and the percentage increases as you get older.

Age Standard Minimum Payment

55 - 64
65 - 74
75 - 79
80 - 84
85 - 89
90 - 94
95+

4 %
5 %
6 %
7 %
9 %
11%
14 %

Transfer Balance Cap

The transfer balance cap is an individual cap that limits the amount of superannuation you can transfer into retirement income streams such as account based pensions where the earnings generated by the fund are exempt from tax.

 

The transfer balance cap for the 2023/24 year is $1.9 million and this will apply to those starting a retirement
income stream for the first time after 1 July 2023. For those already invested in a retirement income stream before this date, their personal transfer balance cap will be between $1.6 and $1.9 million depending on the amount
invested. Each member of a couple has their own personal transfer balance cap. As a couple, it is not possible to combine the caps. A ‘transfer balance account’ is used to calculate how much of the transfer balance cap clients have used and therefore how much they still have available for investment into tax free retirement accounts in the future.

Debits and Credits

Some of the transactions that may impact your transfer balance account include:

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