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Your retirement income is likely to come from a range of areas, and will usually consist of:

  • Centrelink Age Pension – this is a great base for most people to build the rest of their retirement income on
  • Superannuation savings – this can be a very tax-effective way of receiving an income in retirement
  • Other sources – such as investments, savings held outside your super or some form of paid work (if you are transitioning into retirement) 

Regardless of where it comes from, the most important thing to consider is whether you will have enough to provide you with the income you want for the rest of your life.

 

  • Transition to retirement (TTR)

    A transition to retirement strategy may be suitable for people who are eligible to access their super and want to cut back their working hours, but not retire completely. It can be a great way to supplement your income while you wind back gradually to explore new interests and ease into retirement.

    Alternatively it can be used to accelerate your super savings while you continue to work when used in conjunction with salary sacrifice contributions.

    A transition to retirement income stream product, such as VicSuper Flexible Income with Transition to Retirement feature, can offer great financial and tax benefits.

    Features to note include:

    • Investment earnings on Flexible Income accounts with a TTR feature will be taxed concessionally (15%) until you reach age 65 or notify us that you satisfy a relevant condition of release (such as retirement).
    • A transfer balance cap is a lifetime limit on the total amount of superannuation that can be transferred into retirement phase income streams. This cap does not apply to transfers into accounts with the TTR feature but applies once the TTR feature is no longer applicable, for example, on retirement.

    Refer to the VicSuper Flexible Income PDS (PDF) for details.

    If you are considering investing in a VicSuper Flexible Income account with the TTR feature (or are already invested in one), we recommend you call our Member Centre or talk to one of our financial planners to find out how these changes could impact your retirement plans.

     

    Benefits of a transition to retirement strategy

    • Boost your super savings through extra salary sacrifice contributions while maintaining your take home income.
    • Alternatively, cut back your working hours but not your take-home income.
    • Earn tax-free income from your retirement income if you're aged 60 or over.

     

    Is it right for me?

    This strategy must be tailored to an individual's circumstances, so it's important you get expert advice from one of our financial planners.

    However, as a guide it may be best suited to those who:

    • have a taxable income in excess of $19,400 pa and have a marginal tax rate of 19% or more
    • want to reduce their working hours but maintain their standard of living; or
    • want to continue working full-time and boost their super before retirement without affecting their take home pay.

    VicSuper Flexible Income with Transition to Retirement feature is designed specifically for people who want to transition to retirement.

    You can receive up to 10% of your super savings per year as a regular income stream while you continue to work.

     

    At a glance

    VicSuper Flexible Income with Transition to Retirement feature

    A transition strategy suitable for people who are currently over preservation age and still working, but want to supplement their income from their super savings
    Minimum investment
    $10,000
    Payment amount

    Select an income amount between the minimum and maximum limit

    Use our calculator
    Payment frequency

    Twice monthly, monthly, quarterly, half-yearly or yearly
    Investment options

    Choose from nine investment options
    Partial withdrawals

    You are unable to make personal withdrawals except in limited circumstances
    Download PDS

     

  • VicSuper Flexible income

    VicSuper Flexible Income provides you with a cost competitive way to get a regular income from your super savings.

    Why VicSuper Flexible Income?

    • A regular income – Receive a regular income, paid into your bank account.
    • Competitive fee structure – No entry or exit fees, and no commissions paid to financial planners.
    • Invest your savings – Earn investment returns even while you're receiving your income payments.
    • Tax benefits – Once you're age 60, income payments are tax-free.
    • Access to your account 24/7 – VicSuper MembersOnline is a secure online service provided as part of your membership where you can monitor and manage your account, anywhere and at any time.
    • Expert advice – Access to personal advice.

    At a glance

    VicSuper Flexible Income Suitable for people who are retired or eligible to access their super and want to receive a regular income from their super savings
    Minimum investment $10,000
    Transfer balance cap There is a general transfer balance cap of $1.7 million, which is a lifetime limit on the total amount of superannuation that can be transferred into retirement phase income streams.

    From 1 July 2021, all Individuals will have a personal transfer balance cap between $1.6 million and $1.7 million. Individuals who start their first retirement phase income stream on or after 1 July 2021 will have a personal transfer balance cap of $1.7 million.

    It’s important to note that everyone will have their own personal transfer balance cap. You will need to visit ato.gov.au to find out what cap applies to you. This cap applies to all retirement phase income stream accounts you may have, except Transition to Retirement income streams. If you exceed the transfer balance cap, the Australian Taxation Office (ATO) will require you to remove the excess from your income stream(s) and additional tax may apply.
    Payment amount Select an income amount, subject to Government minimum payment requirements.

    Use our calculator
    Payment frequency Twice monthly, monthly, quarterly, half-yearly or yearly
    Investment options Choose from nine investment options
    Partial withdrawals You can make partial withdrawals at any time (except from money invested in a Term Deposit before its maturity date). Minimum of $1,000 per withdrawal.

    Download PDS

    For details on withdrawals, changing your payments, changing your investment options and nominating beneficiaries, see Managing your VicSuper Flexible Income.


    Competitive fee structure

    Fee type Amount
    Administration fee1,2 Account-keeping fee $1.50 per week plus
    Administration fee 0.22% pa
    Investment fee2,3 From 0.00% to 0.32% (estimated) depending on your investment option.
    Indirect cost ratio2,3 From 0.00% to 0.54% (estimated) depending on your investment option.
    Contribution fee Nil
    Investment switching fee Nil
    Withdrawal fee Nil

     


    1The administration fee and account-keeping fee are deducted from your account at the end of each month in arrears. These fees are capped at a combined total of $125 per month per account.

    2 If your account balance for for a VicSuper product is less than $6,000 at the end of our income year, the total combined amount of administration fees, investment fees and indirect costs charged to you is capped at 3% of your account balance. Any amount charged in excess of that cap must be refunded.

    The investment fee and ICR shown are based on the estimated investment related costs that these investment options incurred in the Victorian Superannuation Fund for the 12 months ended 30 June 2020. Actual investment fees and indirect costs may vary and will depend on the actual fees, costs and taxes incurred by us in managing the investment option(s). The figures disclosed are based on historical information provided to us by the former trustee of the Victorian Superannuation Fund. It is anticipated that the investment fees and ICRs incurred in the 2020/21 financial year will change as a result of the transfer of the products to the Fund and a restructure of the underlying investment portfolios and associated reduced fee and cost structures. They cannot be estimated precisely in advance. If it becomes apparent that actual costs will differ materially the estimates will be updated. These fees are not deducted directly from your account. 

Get expert advice

There's a lot to think about when starting a retirement income. Our financial planners can help you work out a strategy that suits you. Find out about our advice service.



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