After working hard for many years, you might be thinking about retiring and achieving some of those dreams like a big trip around Australia, a renovation, or even just more time with family! But you may wonder, what happens to my retirement savings? Some people believe they have to withdraw all their superannuation at once when they turn 65 and leave their super fund, but this isn’t generally true.
When you retire or start working fewer hours, you have several options. You can leave your super invested where it is, withdraw all of it, or open a pension account that pays you directly into your bank account. Opening a pension account can also earn you tax-free interest if you’ve retired. The choice depends on your preferences.
Opening a pension account
When you retire or begin transitioning to retirement, you can open a Vision Super pension account. It’s like receiving a regular pay cheque, or supplementing your part-time pay. You can choose how often to pay yourself, and your funds will stay invested within the superannuation system, potentially offering tax benefits, though returns are subject to investment performance.
Deciding whether to open a pension account depends on your situation and meeting government requirements such as preservation rules and minimum / maximum payment limits. For many, being part of a super fund is a lifelong partnership. Transferring your super to an allocated pension or non commutable allocated pension with Vision Super is now easier with our secure member portal.
Lifetime pension
If you have a defined benefit or deferred benefit account, you might be eligible to start a lifetime pension. If your Defined Benefit account was created before May 1988, you can use up to 50% of your funds to start a lifetime pension account, which pays you for the remainder of your retirement, with some portion going to your spouse (your husband, wife or partner who you live with) on your death. If you’re unsure if you’re eligible, contact us and we’ll help you work it out.
Leave it or take it
Leaving your super in your accumulation account is fine if it suits your needs, though investment returns in a retirement pension are tax free. You won’t be required to take out a minimum amount each year, but setting up regular payments isn’t possible. Taking out the full amount as a lump sum might be an option if you have debts to pay, but remember, once you withdraw the money, you might not be able to put it back!
We can help
Retirement, and planning for retirement, are important stages in anyone’s life. Make sure you take the time to consider your options and seek professional advice where necessary, as this article only covers a few things to consider. Whether it’s a Vision Super financial planner, professional advisors can help you understand all aspects of your financial life, including where you are now, where you want to be, and a plan of how to get there. Financial advice fees may apply.
Contact us on 1300 300 820 Monday to Friday 8:30am to 5pm if you would like to set up an appointment with a financial planner, or email memberservices@visionsuper.com.au
