Transition to Retirement

(What is it??)

Since 1 July 2005, new Government rules give you more options in making the transition from work to retirement. If you have reached your preservation age, you will be able to draw on your super, if your fund allows, without having to retire permanently from the workforce.

For example, you could continue working part-time and use part of your super to supplement your income, instead of leaving the workforce altogether.Under these rules, if you're still working, you will have to receive your super as a particular type of pension.

These pensions, known as 'complying' pensions and 'allocated' pensions, will generally not be 'commutable'. Broadly speaking, this means you won't be able to stop the pension and cash it out as a lump sum.

If you select a 'non-commutable' allocated pension, you will be allowed to take a lump sum once you retire or reach age 65. Or you can stop the pension and put your benefits back into your super fund, for example if you decide to go back to full-time work.

Retirement often sneaks up unexpectedly, so plan ahead.

Now you can see a bit more clearly that you have a lot more choice about when and how you can retire.

You can work only a few days a week, and draw a retirement income in order to supplement your drop in salary.

This of course gives you more control over your lifestyle choices.

Some retirement decisions can prove impossible or expensive to change. Leave your super inside your fund, or inside the superannuation system (for example a rollover fund or approved deposit fund) until you know exactly what to do.

Taking your money out of super may force you to pay unnecessary tax.

Find out how tax and government welfare benefits may affect you. You may also need personal advice from our company, we know all about tax, government benefits and retirement products

Different products let you turn a lump sum into a stream of income for all your life, for a set period of time or until the money runs out. However the type of product we use will depend on your own personal situation.

The fact of the matter is that it is a very complex area which we can help you to navigate through, call or email us in order to set up an appointment for Stephen to review your situation.