HQB’s Weekly SMSF News – Week 13

Pension phase – at what age are my superannuation benefits eligible to be transferred to pension phase?

• Super benefits start off in accumulation phase during a person’s working life.
• Super benefits can be “transferred” to pension phase (or retirement phase) by commencing a pension account (account-based pension).
• This can only be done when a person meets a “condition of release”. The following are the most common conditions of release:
  1. Reaching age 65
  2. Ceasing a form of gainful employment after age 60
  3. Reaching preservation age and permanently retiring (for those born after 30 June 1964, preservation age is 60. Before that date it can vary based on age but ranges from 55 to 59).
  4. Permanent incapacity.
• A person can have a mix of accumulation and pension phase interest in their SMSF at the same time.
• The main benefits of being in pension phase are:
  1. You can receive regular income payments to fund your lifestyle and/or retirement
  2. In most cases the income is tax-free
  3. Any investment income earned on the assets supporting the pension account are generally tax free.
• A person is required to take a minimum amount each year which is a percentage of the account balance. This percentage increases as a person gets older.

Please don’t hesitate to contact our office should you wish to discuss or explore the above and whether it is suitable for you.

– Brad Sheaves

Posted 15.11.2022

This article is compiled as a helpful guide for your private information and is subject to copyright. We suggest that you do not act solely on the basis of material contained in this article because items are of general nature only and may be liable to misinterpretation in particular circumstances. We recommend that our advice be sought before acting on any of these crucial areas.