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Retirement is a big life change that gives you a lot to think about, like what you might do with your SASS benefit. The good news is that you’ve got a couple of options when it comes to withdrawing your money and making it work for you in retirement. Let’s take a closer look at when you can access your benefit and what you could do with it.
 

Continuing as a deferred member

As a deferred member, your SASS benefit remains invested and can continue to grow until you choose to access it, but it’s still subject to government preservation rules. 

Once you turn 65, you need to meet a work test to keep your benefit deferred in the scheme. If you’re 65 to 70, you must work at least 10 hours a week. But if you’re over 70, then you must work at least 30 hours a week. If you don’t meet these work tests, you will need to roll over to another super fund or cash out your benefit (or take a lump sum payment) or do a combination of both. 
 

Cashing out your SASS deferred benefit

You can cash out your SASS deferred benefit under certain circumstances, including: 

  • If you reach age 60 and cease an employment arrangement.
  • In cases of total and permanent incapacity, terminal illness, financial hardship or on compassionate grounds.

What happens next?

You have a couple of options for the money you’re withdrawing from the scheme and there are tax implications to consider for each of these.

You can choose to:
 

Cash out and... What about tax?
1. Take a lump sum

From age 60, money you withdraw as a lump sum is generally tax-free.

It’s also important to be aware that you’re taking your money out of a tax effective environment. Caps and rules relating to super will apply if you choose to contribute it back into a superannuation fund in the future.
2. Roll over to another super fund (for example, to an account-based pension).  You will not pay any personal income tax on money rolled over from SASS to another super fund, such as Aware Super.
3. Combine both options  See above.

 

Keeping your money in super

When you pick options two or three, there are a couple of ways to keep your money in super.   

First there’s a Retirement Income account, which is also called an account-based pension. This account keeps money from your SASS benefit invested and pays you a regular income. 

Planning to keep working for a while longer? With a Retirement Transition account you can work less and top up your income from your super. You can transfer some or all your SASS benefit into your new account and withdraw up to 10% of the balance each year (minimum limits also apply).

 

Weighing up your options

  Retirement Income account^

Invest your SASS benefit and get regular payments.
Retirement Transition account

Get payments from your transition to retirement income account while you’re still working.
How old do i need to be open an account

If you’re age 60 and retired.

If you stop working after age 60.

If you are 65 or over, even if you’re still working.

You can open an account from age 60.

When you turn 65, your Retirement Transition account automatically changes to a Retirement Income account.
How much can I get paid?

You can access regular payments and lump sums, with a minimum annual withdrawal limit set by the government. 

Once the money in your account runs out payments will stop.

 You can access regular payments. Minimum and maximum (up to 10% of your account balance) withdrawal limits apply.
How often can I get paid? Flexible payment options including fortnightly, monthly, quarterly, half-yearly and yearly. Flexible payment options including fortnightly, monthly, quarterly, half-yearly and yearly.
How is my money invested? You choose an investment option for your money or go with the default from your account provider. You choose an investment option for your money or go with the default from your account provider.
What about tax?

If you’re over 60, you pay zero tax on your income payments or investment earnings. 

If you are aged 60 or over, income payments are tax free.

All investment earnings in a Retirement Transition account are taxed at 15%, the same as a regular super account.
How much can I transfer? The general lifetime limit is set by the government and is currently $2 million.   There’s no limit to how much you can transfer into a Retirement Transition account.1  
What is the minimum amount required to open an account?

The minimum amount to open an account varies by super fund, but generally, it is around $10,000 to $50,000.

To open an account with Aware Super, the minimum amount required is $20,000.

The minimum amount to open an account varies by super fund, but generally, it is around $10,000 to $50,000.

To open an account with Aware Super, the minimum amount required is $20,000.

The Transfer Balance Cap (TBC) does not apply to retirement transition accounts. However, care should be taken as you approach age 65 or meet a condition of release as your account may become a standard retirement income account where the TBC limit does apply.

Set up your retirement with help from an expert 

Cashing in your SASS benefit is a major milestone, and often a once-in-a-lifetime decision. The best way forward for you will depend on different factors, like your age, income, lifestyle goals, family situation, and plans. 

An Aware Super financial planner can help you:

  • understand the tax implications of each option
  • plan a transition strategy that fits your life
  • make the most of your benefit and avoid costly mistakes.
     

Aware Super financial planners can help you make confident decisions about your super and retirement. Your first appointment with an Aware Super financial planner is free of cost or obligation. Book an appointment at aware.com.au/statesuperadvice or call 1800 841 633.

Where to next?

Protecting your super from scams

Is a living inheritance right for you and your family?

A simple guide to your SASS statement

Ask an expert

Market review and outlook

Back to Edition 22

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Next steps for deferred members

If you’re a SASS deferred member, knowing your options can help you make sure you have the funds to suit your retirement lifestyle.

Next steps

1 Retirement income and investment earnings are not guaranteed. Payments will cease once the account balance is depleted. 

General advice only. Consider your objectives, financial situation or needs, which have not been accounted for in this information and read the relevant PDS and TMD before deciding to acquire, or continue to hold, any financial product. Advice provided by Aware Financial Services Australia Limited (ABN 86 003 742 756, AFSL 238430), wholly owned by Aware Super. You should read the Financial Services Guide, before deciding about our financial planning services. Issued by Aware Super Pty Ltd (ABN 11 118 202 672, AFSL 293340), trustee of Aware Super (ABN 53 226 460 365).