A transition to retirement account pays you an income from your super savings while you continue to work. This means you can ease into retirement on your terms. Once you have access to your deferred benefit you can roll over your money to another superannuation fund and start a transition to retirement account.
Key points:
- A transition to retirement income account allows you to keep working and access some of your super.
- Whilst a transition to retirement income stream is not available within SASS, it can be accessed by rolling over to a fund that offers this product.
- To be able to access your super as income using a transition to retirement account you need to have reached your preservation age and your scheme earliest retirement age (generally 58).
Rolling your deferred benefit to another super fund
To use your SASS deferred benefit to start a transition to retirement income account you will need to roll your benefit to another super fund (such as an Aware Super Transition to Retirement Income Stream account).
There are benefits of rolling your SASS benefit over to another super fund and having your super all in one place:
- You could save on fees - having more than one super account means you could be paying multiple fees.
- Less paperwork - keep track of your super more with just one account.
- More for you - a bigger balance invested now, could mean more for you when you retire.
Benefits of a transition to retirement income account
When you have both a transition to retirement account and a regular super account they can work together in a tax-effective way.
- Work less but maintain your income. Topping up your salary with super gives you flexibility – you can work less, but not live on less.
- Combined with making additional contributions to super such as salary sacrifice or a personal deductible contribution, a transition to retirement income account is a smart way to put your money to work and save on tax.
- When you salary sacrifice to super you only pay 15% tax, which could be less than your marginal tax rate.1
- Choose when you get paid. Your income payments can be paid fortnightly, monthly, quarterly, half-yearly or yearly. It’s up to you.
- Your super stays invested. The investment returns you earn by keeping your money invested can help you enjoy a higher income in retirement.
- Turns into tax-free income. Once you turn 60 your income payments from your super become tax-free.
- When you reach 65, your transition to retirement account will automatically convert into a retirement income stream account (also known as an 'account-based pension'). This account has tax-free income payments and investment returns.
1 Some of your contributions are taxed at a higher rate if the total of your earnings and super contributions is $250,000 or more.
Setting up a transition to retirement account that gives you the most benefit can be complex. For help working out if it’s a good option for you, book an appointment with an Aware financial planner2.
2 Financial planning services are provided by our financial planning business, Aware Financial Services Australia Limited, ABN 86 003 742 756 AFSL No. 238430.
Things to consider
- Income payments from this account are subject to annual minimum and maximum amounts.
- The minimum you can draw is 4% of your account balance each year and you can’t withdraw more than 10% per year.
- Investment earnings are concessionally taxed at a maximum of 15%.
- If you are 60 or older, income payments are tax free.
- Between your preservation age and age 59, the taxable portion of your income payments are taxed at your marginal tax rate. But you receive a 15% tax offset in your tax return.
- Because you’re withdrawing some of your super, consider how long you’ll need it to last.
- Once you reach 65, your Aware Super Transition to Retirement account automatically converts to an account-based pension. At Aware Super this is a Retirement Income Stream account.
- You can open an Aware Super Transition to Retirement account with a minimum of $20,000.
Why choose Aware Super
We're an industry fund with strong, long-term performance* so you’ll be joining over 1.1 million† Australians who invest their super with us.
*SuperRatings Fund Crediting Rate Survey, 30 June 2024. Based on SR50 Growth (77-90) Index. Returns are after tax and investment management expenses but before the deduction of administration fees. Past performance is not an indicator of future performance.
† Source: Chant West Super Fund Fee Survey 30 June 2024, High Growth [81-95% in growth assets] investment option index and $50,000 account balance. Fees and costs can vary from year to year. Past fees and costs are not a reliable indicator of future fees and costs. Fees and comparisons may differ for other investment options and account balances.
Where to next?
Join Aware Super
Join 1 million+ Australians who choose to invest their super with Aware Super.
Start a transition to retirement account
Create a secure and steady income in retirement.
Need advice?
At Aware, our financial planners are experienced in your State Super scheme and know the ins and outs of planning for a successful retirement.
To help you make better decisions for your retirement, book a no cost, obligation free appointment.
General advice only. Consider if this is right for you having regard to your objectives, financial situation, or needs, which have not been accounted for in this information. Read the PDS and TMD before deciding to acquire, or continue to hold, any financial product. You should read the Financial Services Guide, before deciding about our financial planning services. Issued by Aware Financial Services Australia Limited (ABN 86 003 742 756, AFSL 238430); wholly owned by Aware Super (ABN 53 226 460 365).