Planning your retirement
Your super options
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Super options in retirement
You have a number of options when accessing your super either on the lead up to retirement or when you retire. These options are:
Option 1: Transition your way to retirement
If you elect this option, you simply roll over all or a portion of your super into a product like Asset's Transition to Retirement Flexible pension and decide how much you wish to draw down as your pension. There are pension limits and you don’t have access to your lump sum but once you are fully retired these restrictions are lifted by Asset automatically. To find out more, click here.
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Option 2: Roll your super over into a personal pension.
In this case you would simply rollover your super to a product like Asset’s Flexible Pension product.
You don't pay any tax on the amount rolled over because it's staying in the superannuation system. So all of your money is invested and working for you. And because it's a superannuation pension, the investment earnings (income and capital gains) are completely tax free.
If you are aged under 60, your pension payments are taxed on a pay-as-you-go basis, just like wages or salary, but there are deductions and rebates available that, depending on your circumstances, may reduce the tax you actually pay. If you are over 60, any income from superannuation is tax free.
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Option 3: Take your super as a lump sum
If you elect to do this you will pay tax on it at the appropriate rate, and you can invest what's left. The income you earn on those investments will generally be taxed the same as any other income, and any realised capital gains will be subject to Capital Gains Tax.
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Option 4: Opt for a combination of pension and lump sum
In this case the lump sum is treated in Option 3 above and the pension portion is treated as explained in Option 2. This may allow you some flexibility to pay off some debt, or make a purchase such as a new car and then replace your regular income with the pension component
Determining the best option for you depends on your personal circumstances, your retirement goals and objectives. We recommend that you seek professional financial planning advice before making any decisions in relation to your retirement.
Asset Super offers personal financial planning advice, through an arrangement with Money Solutions and as a member you can access this advice. Click here to find out more or simply call our client service team on 1800 805 981 for assistance.
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