Retire with smartMonday

With smartMonday PENSION, you can enjoy the security of an income stream to help fund your retirement adventure.

If you have a question about retiring with smartMonday PENSION, you should find the answer here. Don’t see what you need? Call us on 1300 880 588 or email enquiries@smartmonday.com.au

 

Q1: What types of pensions do super funds offer?

Super funds typically offer two types of pension:

  • Transition to retirement pension (TRP) - If you’d like to cut back on work and start easing into retirement, you can use part or all of your super to buy a TRP. This will offer you lifestyle flexibility and a regular income before you retire completely.
  • Retirement pension - When you retire completely or meet what's known as a condition of release (see Question 2), a retirement pension will provide you with regular income.

Q2: When can I start a pension?

You can start a TRP when you reach your preservation age, which is based on when you were born:

Born Preservation age
Before 1 July 1960 55
1 July 1960 - 30 June 1961 56
1 July 1961 - 30 June 1962 57
1 July 1962 - 30 June 1963 58
1 July 1963 - 30 June 1964 59
From 1 July 1964 60

 

You can start a retirement pension if you:

  • have reached your preservation age and are permanently retired, or
  • meet a condition of release, which means you:
    • leave an employment arrangement at or after age 60, or
    • are age 65 or older, or
    • are permanently incapacitated or terminally ill.

Q3: How can an income stream benefit me?

An income stream can be a tax-effective way to convert your super into regular income payments that supplement or replace your salary.

Q4: What makes an income stream tax effective?

Your income payments are tax-free once you reach age 60. You do pay tax on them before age 60, but you may be eligible for a tax offset of up to 15% on any taxable amount.

If you have a retirement pension, investment earnings on assets in your account are tax-free. If you have a TRP, earnings are taxed at up to 15%.

Q5: Are there limits on the amount of income I can take from my pension?

Yes, Government limits do apply. You must take at least 4% of your account balance as income each year (more if you're age 65 or older). If you have a TRP, you can take up to 10% of your account balance as income. There's no maximum limit on how much income you can take from a retirement pension.

Q6: Can I withdraw lump sums from my pension account in addition to my income payments?

If you have a retirement pension, you can withdraw part or all of your account at any time. If you have a TRP, you generally can’t withdraw lump sums.

Q7: How much super do I need to set up a pension?

You need to contribute a minimum initial investment of $20,000 from your super savings. If you want to use super from a number of funds, our pension consolidation account allows you to roll it all together before you buy your pension.

Q8: Can I choose how often I get an income payment?

Yes. With smartMonday you can choose monthly, quarterly, half-yearly or yearly income payments.

Q9: Can I choose how to invest my account?

Yes, smartMonday PENSION offers over 30 investment options, and you can mix and match to create a customised portfolio that suits your investor personality and needs. For more information, see investments and dashboards.

Q10: What about fees?

Fees include an annual membership fee, asset administration fee and a management fee. If you have over $250,000 in your account, you'll receive a rebate on your asset administration fee. See the Product Disclosure Statement for current costs and any other fees that may apply.

Q11: How long will my income stream last?

Your income payments will continue as long as there's enough money in your pension account, and that depends on a number of factors. The pension calculator on the Government's MoneySmart website can help you work out how long your pension might last.

Q12: If I die, can my spouse receive the income stream?

When you set up your pension account, you can nominate your spouse to receive the death benefit as a continuing income stream.

Q13: I need some help deciding. Who can I talk to?

A financial adviser can help you make decisions about pension income streams and a wide range of financial matters. But if you don't have an adviser, call us on 1300 880 588 or email enquiries@smartmonday.com.au to ask about the advice services available through your membership.


More information

Pension + lifestyle flexibility

A transition to retirement pension allows you to structure your work, income and super needs to help meet your financial goals both now and in retirement. For example, you might want to:

  • cut back your working hours and use your income stream to supplement your reduced pay, or

  • you'd like to cut back on work and start easing into retirement, you can use part or all of your super to buy a TRP. This will offer you use your income stream to cover 'extras' such as home renovations or an overseas holiday, or

  • put some of your before-tax pay into super (salary sacrifice) and use your income stream to replace the pay you have 'sacrificed'. This can be a tax-effective way to boost your super for retirement, and it can also reduce your income tax bill.

How long your income stream may last

A pension may not provide an income stream for the rest of your life.

Factors affecting your pension account balance are your initial investment, the amount of income payments and withdrawals you make, fees and investment returns from your chosen investment option/s. For a TRP, your balance is also affected by tax on investment earnings.

If you have a retirement pension (which has no maximum limit on how much you can withdraw as either income or lump sums), managing your withdrawals carefully will help minimise the risk of your account running out of money.

 

Contact us

1300 880 588
PO Box 1949, Wollongong NSW 2500
 
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Make Mondays matter

smartMonday is the business name of the Aon Master Trust ABN 68 964 712 340 (the Fund) which has been registered by Aon Hewitt Limited ABN 48 002 288 646 AFSL 236667 as sponsor of the Fund. The Trustee of the Fund is Equity Trustees Superannuation Limited ABN 50 055 641 757 AFSL 229757 RSE Licence L0001458. smartMonday PRIME, smartMonday DIRECT and smartMonday PENSION products are part of the Fund.
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