Account Based Pension

By Jason Fittler

Once you have reach preservation age you are able to access your superannuation.

You can do this through a lump sum withdrawal or an account based pension. 

Before you start to take money out you first need to meet the conditions of release.

First you must reach preservation age as per the below chart:

Once you have reached preservation age you can start what is called a Transition to Retirement  (TTR) pensions this allows you to take between 4% and 10% of your super as a pension each year.

The TTR will stay in place until you either reach the age of 65 or the age of 60 and you have retired from the work force and will be working less the 10 hours per week.

Once these conditions of release have been met, you are able to move into a full account based pension. At this point you will need to meet the minimum pension requirements each year but there is no maximum pension amount.

 Age

Percentage of Fund Value

Under 65

4%

65-74

5%

75-79

6%

80-84

7%

85-89

9%

90-94

11%

95 or more

14%

 

In the 2013 Budget new tax measures were introduced in regards the tax status of pensions paid from an account based pension account. Previously, once you moved into an account based pension all of the income produced by your super fund was tax-free.

From 01/07/2014 any income your pension account earns above $100,000 will be taxed at a rate of 15% inside of the super fund.

The pension payment made to the beneficiary (you) will still be tax-free.

If you would like more information please give us a call on (07) 4771 4577.