Preservation Age

Before accessing your superannuation, you must reach your preservation age. This age is dependent on which year you were born in.

Current Preservation Ages

Preservation Ages

Retirement Options To Consider

Transition To Retirement Strategy (TTR)

By the using the governments transition to retirement strategy you are able to gradually reduce your work hours as you reach the age of retirement with possibly not lowering your current income.

The transition strategy allows you to access your super to make up for the wage gap between your former full time employment salary and your current part-time wage.

This will allow you to continue living the same standards as you were during full-time employment. When transitioning to retirement through this strategy you are able to continue making contributions to your superannuation through salary sacrificing.

Minimum and maximum limits

When using the transition to retirement strategy there are minimum and maximum limits you must reach to redeem funds. During your use of a TTR account a minimum of 4% and maximum of 10% must be withdrawn.

Lump Sum Withdrawals

Transition to retirement strategy accounts do not allow for lump sums to be removed as this money can only be accessed once the transition to retirement is completed.

Contribution Caps

During the use of the TTR strategy you are still able to boost your superannuation with salary, save on tax and pay less tax on income if contributions are made within the contribution caps.

Other options for use for TTR

Another use for TTR income is that the extra income you are receiving per annum can be used to help make extra repayments on your debts your currently have like a home loan which will help pay these loans out quicker, saving interest charged on the loan and hopefully been cleared by retirement?

A second option is called a recontribution strategy, which means taking the money you are receiving from your TTRincome, normally tax free after age 60 and contributing this back into super again which helps build your tax freecomponent of your super fund. This helps reduce the tax proportion of your fund and will reduce the tax payable by an adult dependant (eg family member) receiving your benefit as a lump sum if you have passed.

For more details, please visit the ATO website.

Account Based Pension

An account-based pension allows for your pre-retirement pay to be taken out of your super once you retire. By using an account-based pension when you retire you are able to select the amount you receive and frequency of when you receive this sum. It has the flexibility to increase and decrease the amount of income you receive per month or year and can be easily changed if required to adjust to your current lifestyle. You have access to lump sum withdrawals for bigger purchases such as a new care or holiday if required.

Before creating an account-based pension account you must reach the preservation age of the year of your birth. The longevity of your account will be based on the amount of super you have prior to starting an account-based pension, how much the pension investment earnings have made each year, how much you are drawing down from the capital compared to what the fund has made and how much it costs to run your pension account.

By having annual reviews, we can consider your current investment balances and returns, to make sure that your capital can extend past your life expectancy age.

For more details, please visit the ATO website.

Centrelink

The age pension will help those as they reach the age of retirement and cannot be self-funded.
To be eligible for the aged pension you must have reached the correct age, be below the income and assets test limits, and are an Australian resident.

The income and assets test are used to determine how much your final assets produce in income and how much they are worth to see if they exceed the limit. This will result in you receiving a reduced payment per fortnight and receiving only a part age pension on no age pension at all.

The amount which you will receive from the age pension varies on a number of factors, including if you are living alone, with a partner or separated by illness.

If you are a self-funded retiree, you may still be eligible for a partial payment of the age pension or a health concession card.

Please see below as a guide from the Centrelink website

Full Pension

From 1 July 2020, pensions reduce when your assets are more than the limit for your situation.

Your Situation - assets

How much can you get paid?

Normal rates

Transitional rates

Some people who were getting part pensions on 19 September 2009 are on transitional rates. This is until they catch up with the current normal rates.

Transitional pension rates

For more information regarding the age pension please visit the Centrelink website.

My best advice is to contact us for an appointment to discuss in detail what would work for you and what you may be entitled to if you are fully retiring soon.

Mitchell Advice Pty Ltd ABN 44 625 356 872 t/as Orange Financial Planning is a Corporate Authorised Representative of Synchron AFS License No 243313. Unless specifically indicated, the information contained in this email is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek personal advice from a financial adviser

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