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Retirement income stream
(income after retirement)
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Transition to retirement income stream
(income before retirement)
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Who can invest?
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If you have a superannuation benefit of at least $20,000 and you have satisfied a condition of release with no cashing restrictions, simply transfer money from your existing superannuation account to your income stream account. |
If you have a superannuation benefit of at least $20,000 and you have reached your preservation age, simply transfer money from your existing superannuation account to your income stream account. |
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Why would you invest?
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- You have retired (or satisfied another condition of release) and need income.
- You want flexibility in the income you receive each year.
- You want the option of withdrawing lump sums.
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- You have reached your preservation age.
- You want to make a gradual adjustment to retirement by reducing your working hours and using a transition to retirement income stream to supplement your reduced salary.
- You wish to continue working full time, increase your contributions to your superannuation and at the same time, draw income from your transition to retirement income stream account.
- You want flexibility in the income you receive each year.
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Tax benefits
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- No tax is payable on income stream payments after you reach age 60.
- Where you have not reached age 60, the taxable component is taxed at your marginal rate plus Medicare levy but a 15% tax offset may be available on the taxable amount. You may also be entitled to a tax-free amount.
- The investment earnings on assets in the Fund supporting your retirement income stream are tax free.
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- No tax is payable on income stream payments after you reach age 60.
- Where you have not reached age 60, the taxable component is taxed at your marginal rate plus Medicare levy but a 15% tax offset may be available on the taxable amount. You may also be entitled to a tax free amount.
- The investment earnings on assets in the Fund supporting your transition to retirement income stream are tax free.
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How much can you withdraw?
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- You must withdraw a minimum percentage of your account balance every year.
- The percentage varies from 4% to 14% depending on your age.
- There is no limit on the maximum amount you can withdraw from a retirement income stream, so you need to manage your withdrawals carefully so your account does not expire too early.
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- You must withdraw a minimum percentage of your account balance every year.
- A maximum of 10% of the account balance can be withdrawn each year.
- From that time, there is no limit on the maximum amount you can withdraw.
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Lump sum withdrawals
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You can withdraw lump sums at any time. A fee of $30 applies.
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You can only withdraw lump sums in limited circumstances before you satisfy a condition of release. When you have satisfied a condition of release, the rules for withdrawing lump sums from a retirement income stream apply to your transition to retirement income stream. A fee of $30 applies.
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Frequency of payments
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- You can choose to be paid fortnightly, monthly, quarterly, half-yearly or yearly.
- One-off withdrawals also available
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- You can choose to be paid fortnightly, monthly, quarterly, half-yearly or yearly.
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Entry fee
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Nil.
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Investment fee
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Currently estimated to be between 0.10% to 0.47% pa. Depends on the investment strategy or strategies in which your income stream account is invested.
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Administration fee
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$4.33 each month (equivalent to $1 each week) plus 0.20% pa of your income stream account balance deducted monthly.
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Contributions to your income stream
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Once your income stream commences, you cannot make additional contributions to your account. You can, however, either open a second account with a minimum investment of $20,000, or invest in a separate non pension superannuation account in First State Super (subject to meeting certain legislative conditions).*
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How long will the income stream last?
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Your income stream does not have a fixed term so it will last as long as you have money in your account.
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Investment choice
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You can choose from ten investment strategies and you can invest in more than one strategy at a time. If you do not make a choice, your income stream account will be invested in the Diversified strategy (if you are aged under 56) or in the Balanced strategy (if you are aged 56 or more).
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Death benefits/Estate planning
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In the event of your death, your spouse can continue to receive the income stream payments or elect to commute the income stream and take a lump sum (if you nominate your spouse as a reversionary beneficiary before your income stream starts). If you do not nominate your spouse as a reversionary beneficiary, you can nominate the person(s) you would like to receive your death benefit should you die. |
