You can get regular income payments into your nominated bank account. Think of it as a top up to your regular pay.
There are a few rules around setting up a Retirement Transition account:
- You’ll need to deposit a minimum of $20,000 into your account.
- You must withdraw a minimum amount from your account balance each year1.
- You can’t withdraw more than 10%1 of your account balance each year.
- You can’t make lump sum withdrawals unless you meet certain conditions.
- If you are 60 or older, income payments are tax-free.
- If you are aged from 55 to 59 your income payments are subject to tax, but a 15% tax offset applies.
- When you turn 65, this account automatically converts to an Aware Super Retirement Income account.
1. These are Government set annual minimum and maximum withdrawal rates.
To open a Retirement Transition account you must also have a super accumulation account.
Once your Retirement Transition account is open, you can’t add more money to it. If you would like to add money from more than one super account, you'll first need to combine it in an Aware Super Future Saver account, and then transfer one payment into your new Retirement Transition account. You can put money into your Retirement Transition account from other sources, such as personal savings. It needs to go into your super accumulation account first (but be aware there are caps of how much you can contribute to your accumulation account).
You’ll have two accounts:
- your super accumulation account. This account will continue to receive your employer and other contributions. It will also continue to give you access to your insurance. Your retirement account doesn’t offer insurance, and
- your Retirement Transition account. This account will give you regular income payments.
There can be tax benefits when you open a Retirement Transition account. You can combine the income payments with salary sacrifice contributions into super. This can reduce your taxable income.
To find out whether this is an option for you, you should speak to a financial adviser.
How much you get paid
How much and how often you get paid is up to you.2 You can choose to be paid fortnightly, monthly, quarterly, half-yearly or yearly. You can make changes to your payments at any time.
2. Subject to the Government annual minimum and maximum withdrawal rates.
How much you can withdraw
- The minimum annual payment is 2% of your account balance at 1 July. This is for the 2022/23 financial year. The default minimum will return to 4% from 1 July 2023. This is subject to government legislation.
- The maximum annual income payment is 10% of your account balance at 1 July each year.