VicSuper Retirement Income Solution

Your retirement income is likely to come from a range of areas, and will usually consist of:
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 from
  • Superannuation savings – this can be a very tax efficient 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.
  • Centrelink Age Pension – this is a great base for most people to build the rest of their retirement income from
  • Superannuation savings – this can be a very tax efficient 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.

Very helpful to know that our retirement strategy will deliver what we want if we continue along the proposed path, and that our super will last the distance.

Joe Member comment after meeting one of our financial planners

VicSuper Retirement Income Solution
VicSuper Retirement Income Solution

VicSuper offers a range of retirement income accounts.
VicSuper offers a range of retirement income accounts.

Transition to Retirement (TTR)

Need to build your super savings fast or ease into retirement? A transition to retirement strategy can allow you to build additional super or supplement a reduced income while you continue to work.

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, such as VicSuper Flexible Income with Transition to Retirement feature, can offer great financial and tax benefits.

A number of super changes will take effect from 1 July 2017. They include:  

  • Investment earnings on Flexible Income accounts with a TTR feature will be taxed. 
  • A 'transfer balance' cap of $1.6 million will apply to the amount of super you can transfer into your retirement account/s without incurring additional tax. This 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 Flexible Income PDS (PDF) for details of these changes.

If you are considering investing in a Flexible Income account with the TTR feature (or are already invested in one), we recommend you call our Member Centre or talk to a VicSuper financial planner 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 pay.
  • Investment returns on your super retirement income are tax-free.
  • You can 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 a qualified VicSuper financial planner.

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.

How can I do this through VicSuper?

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 age 55 or over 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

Flexible income

VicSuper Flexible Income provides you with a low-cost 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 payments.
  • Tax benefits – Investment earnings are tax-free, and once you're age 60, pension payments are also 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 no obligation.

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 

Payment amount

Select an income amount above the minimum limit

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 Flexible Income.


Competitive fee structure

VicSuper charges no entry or exit fees, and we don't pay commissions.

Fee type  Amount  

Management costs*

Administration fee 

0.28% pa

Account-keeping fee

$1.50 per week 

Operational risk reserve cost

0.00% pa  

Investment management cost  

From 0.00% to 0.55% (estimated)
depending on your investment option.

Entry fee 

Nil

Contribution fee

Nil

Investment switching fee

Nil

Withdrawal fee 

Nil

Exit fee

Nil

* The 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. The investment management cost is an estimate for the 2016/17 financial year and varies from time to time and depending on the investment option/s you choose. For further details on fees that apply to VicSuper Flexible Income members refer to the VicSuper Flexible Income Combined FSG and PDS.

Guaranteed Income accounts

VicSuper offers two Guaranteed Income accounts1:

  • Guaranteed Income for Life, which pays an income for the rest of your life, and
  • Guaranteed Fixed Term Income, which pays an income for your chosen term (from 1-40 years).

One, or both, of these accounts may suit you, depending on your circumstances.

How do they work?

In return for your initial lump sum investment, you receive a series of payments for a period of time, as nominated by you (either as monthly, quarterly, half-yearly or yearly payments).

They're generally best suited to those who want the security of receiving a set amount of income over an agreed period of time.

At a glance

Guaranteed Income for Life Guaranteed Fixed Term Income

Suitable for members aged 60 or above who are looking to convert part of their super into a guaranteed income for the rest of their lives.

 Suitable for members aged 60 or above who are looking to convert part of their super into a guaranteed income for a set period of time.

Minimum investment

$10,000

Minimum investment

$10,000 

 Payment amount

The amount of your regular income payments is determined at the time you invest in the account. It will depend on the initial investment, prevailing interest rates, the account options you choose, the nominated withdrawal period and your life expectancy (and the life expectancy of any reversionary) at the time you invest in the account. 

Payment amount

The amount of your regular income payments is determined at the time you invest in the account and will depend on the initial investment, prevailing interest rates, the account options you choose, and the investment term selected.

 Payment frequency

Monthly, quarterly, half-yearly or yearly.

Payment frequency

Monthly, quarterly, half-yearly or yearly, unless you choose to invest in a one year Guaranteed Fixed Term Income account, in which case you must receive payments monthly, quarterly or half-yearly.

Investment term

Your lifetime or the lifetime of you and your reversionary.

 Investment term

1 to 40 years.

Withdrawal period

The minimum withdrawal period is 10 years and the maximum period is life expectancy, subject to regulatory requirements. Speak to one of our financial planners for further information.

Withdrawal period

1 to 40 years. Speak to one of our financial planners for further information.

Download PDS
Download PDS

The income you receive is determined when you first invest, and is then paid over your nominated term – regardless of market ups and downs. And, if you have a Guaranteed Fixed Term Income Account, you can elect to receive some or all of your initial investment amount in your regular payments, or as a lump sum payment at the end of the term.

Our Guaranteed Income accounts also have the following features1:

  • ability to choose an option that protects you from increases in the cost of living (for fixed terms of two years or more)
  • option to nominate a partner to receive any remaining benefits in your account as an ongoing income if you die
  • option to choose a withdrawal period, when some money will be paid to your beneficiaries or estate if you die during that period
  • ability to withdraw fully within the withdrawal period
  • the cost of administering the account is included when the payment rate is first determined, so there are no ongoing direct fees or charges
  • retirement income payments are tax-free
  • favourable assessment for Centrelink Age Pension eligibility, particularly under the income test

1 The money you invest in a Guaranteed Income account is invested in a life policy (Policy) issued to VicSuper by Challenger Life Company Limited (ABN 44 072 486 938, AFSL 234670) (Challenger Life), a life insurance company within the Challenger group of companies. The benefits provided by the Guaranteed Income accounts are supported by the Policy, and not VicSuper Pty Ltd (VicSuper) as Trustee of the VicSuper Fund. VicSuper will only pay members their payments under the Guaranteed Income accounts to the extent that the Trustee receives payment from Challenger Life. Challenger Life’s ultimate parent is Challenger Limited (ABN 85 106 842 371, AFSL 234670). Neither Challenger Limited nor any other company within the Challenger group of companies guarantees the performance of Challenger Life’s obligations or assumes any liability in connection with the Policy. All references to guarantee refer to amounts payable under the Guaranteed Income accounts being guaranteed from the available assets of Challenger Life’s Statutory Fund No.2. For more information about the guarantee, limitations and risks associated with the guarantee, please read the Guaranteed Income Product Disclosure Statement.

2Please refer to the Guaranteed Income Combined Financial Services Guide and Product Disclosure Statement for more detailed information regarding the Guaranteed Income products.


Fees and charges

Fee type   
 How and when paid 
Amount
Guaranteed Income for Life Guaranteed Fixed Term Income 

Investment fee

Not applicable
 Nil
 Nil

Administration fee

Included in the calculation of the income payment (not deducted directly from an account of yours or from your income payments). 0.15% pa of initial investment
RCV100 

0.20% pa of initial investment

RCV 0-99

0.20% pa of reducing initial investment

Buy-sell spread

Not applicable  Nil  Nil

Switching fee

Not applicable  Nil  Nil

Exit fee

Not applicable  Nil  Nil

Advice fees 

Relating to all members investing in the product.

Not applicable  Nil Nil

Other fees and costs

Refer to 'Additional explanation of fees and costs' in the Guaranteed Income Combined FSG and PDS for information about other fees and costs such as advice fees for personal advice.  

Indirect cost ratio

Not applicable  Nil  Nil

Costs incurred by VicSuper and Challenger Life are taken into account when the regular payments you will receive over the life of the account are calculated, and various assumptions are made regarding your longevity (for Guaranteed Income for Life) and the potential investment return. This means that you do not pay VicSuper or Challenger Life any direct fees or charges.

For further details on fees that apply to VicSuper Flexible Income members refer to the Guaranteed Income Combined FSG and PDS.

Get expert advice
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. There's no obligation, and in most cases, no additional cost either. Find out about our advice service.

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.
There's no obligation, and in most cases, no additional cost either. Find out about our advice service.