Your options in retirement
If you are retiring, or approaching retirement, you need to know about the advantages and disadvantages of keeping your money in super or taking it out. The right option for you will depend on your overall financial circumstances, as well as your short and long-term plans.
The best thing to do now is to learn as much as you can about your options and seek advice. VicSuper offers a superannuation advice service without obligation and at no charge, where you can meet with an experienced superannuation adviser to discuss your options. Please call our Member Centre on 1300 366 216 to make an appointment.
Retirement income streams
VicSuper currently offers two pensions:
If you are planning to retire, you may like to consider a commutable pension. Commutable pensions are designed for people who have retired and want to leave their money in a super fund so that they can draw a regular income stream rather than withdrawing their money as a lump sum.
If you are making the transition to retirement, you may like to consider a non-commutable pension. These are designed for people who have reached their preservation age and would like to access their super savings in the form of regular pension payments, without retiring from the workforce.
Tax advantages
- Pension payments and any lump sum withdrawals will be paid tax-free if you are age 60 or over.
- Tax-free investment returns within the fund.
- If you are under age 60, part of your pension may be tax-free and you may be eligible for a tax offset of up to 15% on the taxable component of your pension.
See Pensions for more information on the features of VicSuper Pensions. You can also download the VicSuper Pensions Combined FSG and PDS from Publications. If you would like a copy sent to you, complete our online request form or call our Member Centre on 1300 366 216.
Main features of VicSuper Pensions
| VicSuper Commutable Pension | VicSuper Non-Commutable Pension |
|---|---|---|
Can I choose to invest my money in any of VicSuper's investment options? | Yes | Yes |
Can I make a lump sum withdrawal at any time (excluding funds invested in the Term Deposit Option)? | Yes | No |
Is there a minimum annual pension payment amount? | Yes | Yes |
Is there a maximum annual pension payment amount? | No | Yes |
Can I begin this income stream with preserved super benefits? | No | Yes |
Are my investment earnings tax-free? | Yes | Yes |
Could some of my pension income be tax-free? | Yes | Yes |
Are my pension payments and lump sum withdrawals (if applicable) tax-free if I am age 60 or over? | Yes | Yes |
Can I receive a tax offset on my income if I am eligible? | Yes | Yes |
Is my pension guaranteed for life? | No | No |
Will my pension payments run for a fixed term? | No | No |
Is the pension amount I receive the same each year? | No | No |
Is my account balance assessed under the Assets Test for Centrelink? | Yes | Yes |
Will a portion of my pension income not be assessed against the Income Test for Centrelink purposes? | Yes | Yes |
Can I elect a reversionary beneficiary? | Yes | Yes |
Can I submit a binding or non-binding death benefit nomination? | Yes | Yes |
Superannuation advice
The tax and Centrelink benefit rules surrounding superannuation pensions can be confusing. Our superannuation advisers would be happy to discuss your personal superannuation situation and recommend a strategy to suit you. To make an appointment, please call us on 1300 366 216.
