Reduce your working hours and access your super as additional income when you reach your preservation age.

Retirement is changing. With more of us choosing to extend our working lives, the reality of ‘downing tools’ at retirement age is less and less the norm.

The good news is, once you reach preservation age, you can tap into your super for extra income and take advantage of some tax benefits, just by setting up a flexible Transition to Retirement Income Stream (TRIS). It’s a great way to work less, on the same income, or work the same hours and use your extra regular income to boost your super before you even think of retiring.

Retirement Income Stream improvements

One of the lowest fees

 Choose what to do with your extra income

A Transition to Retirement Income Stream can be a great way to:

  • Boost your super, pay less tax and work the same hours

    If you plan to keep working, a TRIS can be a great way to top up super and maintain your take-home pay. And once you reach age 60, your TRIS payments are tax-free.

  • Work less, without reducing your income

    Take away the worry of a salary cut when reducing your working hours by supplementing your income with a TRIS

  • Pay off debt before you retire

    Keep working and clear your remaining debt with the cash injection of a TRIS.

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Transition to retirement income streams

Transition to retirement income stream

This scenario is based on a 60 year old with a salary of $60,000 p.a. increasing in line with consumer price inflation (CPI) of 2.5% p.a.; and a commencing super balance of $200,000, of which the whole balance is initially transferred to the Transition to Retirement Income Stream. This is based on current legislation and product rules and includes the following assumptions:

  • Employer contributions (SG) are 9.50% of salary during 2020/21 and increase in line with legislated increases to 12% of salary during 2025/26 and beyond. It is assumed the employer has agreed to calculate SG contributions based on pre-salary sacrifice income.
  • Salary sacrifice contributions have been adjusted annually to ensure when combined with the employer SG, the concessional contributions cap of $25,000 is reached and not exceeded.
  • The concessional contributions cap is assumed to remain at $25,000 p.a. Pat hasn’t put in place any salary sacrificing before he commences the transition to retirement strategy.
  • SG and salary sacrifice contributions are taxed at 15%.
  • The income from the transition to retirement pension seen adjusted annually during this projection to ensure that Pat's annual take-home pay (after allowance for assumed future changes in the cost of living) remains constant over the projection period.
  • When Pat is less than 60 years of age income stream payments are taxable and allow for a 15% tax offset. Payments are tax free from 60 years of age.
  • Pat’s living expenses are set to spend all the income and all income stream payments are redirected to super as salary sacrifice contributions.
  • A rate of return of 5.50% p.a., net of fees and taxes has been applied to the super and transition to retirement accounts.
  • Admin fees are $52 p.a., plus 0.20% p.a. (percentage based fee capped at $1,500 p.a.) for both accounts
  • Investment costs for the Balanced Growth investment option are estimated to be 0.58% p.a.
  • It is assumed no insurance is held on the Accumulation account and therefore no premiums being deducted

Please note that all projections are as at 1 July 2020, based on current economic and investment conditions, current legislation (including tax and super amongst others), inflation and interest rates, estimates of an assumed future income and capital growth rates. So the ability of the projections to predict actual long-term outcomes is limited as these factors may change in the future. Accordingly, our figures are estimates only and do not constitute a guarantee of future investment performance. Regularly reviewing your plans will assist in amending your strategy to manage these changes.

This case study is for demonstrative purposes and includes general information and financial projections based on assumptions about the future. Results may differ depending on the accuracy of these assumptions, your situation and other factors.

It does not take into account your specific objectives, financial situation or needs. You should consider the information having regard to your personal circumstances. It is recommended that you consult a financial adviser if you require financial advice that takes into account your personal circumstances.

An initial discussion with an Aware Super financial planner, at no cost to you, will help you determine the level of advice you may need to achieve what you want. Advice is provided on a fee-for-service basis and will vary depending on the complexity of your financial affairs. Fees for comprehensive advice relating to your super account with Aware Super can be deducted from your account.

Start a Transition to Retirement Income Stream in a few simple steps

Setting up a TRIS account is simple. Simply link it to your super account and decide how much of your super balance you want to transfer across.

Already a member of Aware Super?

Download and complete the Transition to Retirement form and read our Transition to Retirement Income Stream Member Booklet* to learn more about how it all works, from choosing an investment mix to nominating a beneficiary.

Please consider your own financial position, objectives and requirements and seek financial advice before making any financial decisions.

You should consider combining multiple funds before opening an income stream. You can only make one transfer into your income stream, so ensure you have the amount you want transferred in the one super account. You will need to have your super account set-up before you can do this.

Combine your super now

Think about how long you need your money to last, and how often you want to receive payments when you apply to set up an income stream. This is something you will need to tell us when you fill out an application form to transfer to an income stream.

Nominating a beneficiary is important as it tells us who you would like to leave any money in your TRIS account to in the event of your death. When deciding who gets your money when applying to open an income stream, you can choose from:

  • Your spouse;
  • Your child/children;
  • A dependent; or
  • Your legal personal representative.

Not a member of Aware Super?

You can only start an Aware Super Transition to Retirement Income Stream account from an Aware Super superannuation account. To do this, you’ll have to join the fund as a personal member, then you can deposit or roll money into your Transition to Retirement Income Stream account. This will also entitle you to all the benefits available to our members, such as free simple advice related to your account.

Join Aware Super

You should read the Member Booklet* for personal members before making a decision.

You should consider combining multiple funds before opening an income stream. You can only make one transfer into your income stream, so ensure you have the amount you want transferred in the one super account. You will need to have your super account set-up before you can do this.

Combine your super

Download and complete the Transition to Retirement form and read our Transition to Retirement Income Stream Member Booklet* to learn more about how it all works, from choosing an investment mix to nominating a beneficiary.

Please consider your own financial position, objectives and requirements and seek financial advice before making any financial decisions.

Think about how long you need your money to last, and how often you want to receive payments when you apply to set up an income stream. This is something you will need to tell us when you fill out an application form to transfer to an income stream.

Nominating a beneficiary is important as it tells us who you would like to leave any money in your TRIS account to in the event of your death. When deciding who gets your money when applying to open an income stream, you can choose from:

  • Your spouse;
  • Your child/children;
  • A dependent; or
  • Your legal personal representative.

Things to keep in mind

To work out if a Transition to Retirement Income Stream is right for you, you need to know the rules about its use. These include:

  • You generally can’t make lump sum withdrawals.
  • You must receive between 2% and 10% of your TRIS balance each year^1.
  • Drawing from your super now could mean you have a lower balance when you fully retire.
  • While you’re under 60 years of age, your TRIS payments will be subject to tax – any taxable component will be taxed at your marginal tax rate less a 15% offset. From 60, you don’t pay any tax on income payments from your super.
  • Earnings in your TRIS receive the same concessional tax treatment as your super – earnings are taxed at up to 15%.

Moving on from full-time work is a big decision. Don’t go it alone.

While easing into life after work can be exciting, there’s a lot to consider.  Maximising any Centrelink entitlements, asset allocation, income streams, estate planning, tax breaks, lump sums: there’s a lot to consider. That’s why we provide different levels of support and advice to help you make the best decisions for your circumstances.

Simple retirement advice

We know retirement planning can be complex. As an Aware Super member, you have access to simple financial advice about your super, retirement income stream options and insurance with us.

Advice for more complex matters

When planning ahead, financial advice can make a big difference. For a cost, one of our fully qualified financial planners can help with advice that delves into areas like age pension and other government entitlements, investments outside super, maximising tax breaks and establishing a transition to retirement strategy.^2

Book your appointment

What to do when you’re ready to fully retire

Once you’ve reached your preservation age and permanently retire, you’ll be eligible to open a Retirement Income Stream. This lets you tap into more flexible income payment options, like lump-sum withdrawals, and you can benefit from tax-free investment returns. 

Learn more about a Retirement Income Stream

Preservation age

Your preservation age is when you can first access your super. It changes, depending on your date of birth and is currently 57 years of age.

Date of birth Preservation age (years) Earliest Access
Before 1 July 1960 55 Eligible now
1 July 1960 – 30 June 1961 56 Eligible now
1 July 1961 – 30 June 1962 57 Eligible now
1 July 1962 – 30 June 1963 58 May be eligible
1 July 1963 – 30 June 1964 59 1 July 2022
After 30 June 1964 60 1 July 2024

How much will you have in retirement?

Calculate your retirement

* This Product Disclosure Statements retains the First State Super branding and trustee name. For more information on the change of our brand and trustee name to Aware Super Pty Ltd see here.

  1. As a result of the COVID-19 crisis, the Government has reduced the minimum annual payment required for account-based pensions by 50% in the 2019–20 and the 2020–21 financial years. ↩

  2. The total annual fee (inclusive of admin and investment fees) for our Accumulation Fund Growth option is 1.10% p.a., the industry average is 1.43% p.a., Chant West Super Fund Fee Survey, March 2020, based on a $50,000 balance in a Growth option. ↩

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