I had no idea where my lost super was or the names of the funds. I just new it was scattered everywhere and I should definitely have more than $3,000 in my super. Australian Super Finder found all 7 of my funds and now my balance is almost $50,000. Thank you so much for getting my super back on track. ? Leonie, Thomastown VIC

Super Facts and Tips

Transition to Retirement (TTR) Pension with SMSF

In the past, there are only two options in a self-managed super fund. It could either be through accumulation, and by accumulation we mean that we add your super fund on the particular day you retire, and then you go into pension mode.

Reaching Pension Mode

One of the aims of superannuation is to reach pension mode. The main advantage is the total fund becomes tax-free. And so there are funds that serve as taxable income, in accumulation mode, the fund pay tax at a rate of 15%. In pension mode, the rate is 0%. So it's a big advantage to be in pension mode.

Many people exit the workforce just to be in pension mode. And therefore, the government introduce this middle ground which is called ‘transition-to-retirement'. The procedure transition-to-retirement is done when you decide to wear down your working activities. So if you have a balance in your accumulation fund, you can put that into a bucket, so to speak, which is called transition-to-retirement. ; And in transition to retirement you will pay tax at a rate of 0%; the same as you were in pension.

The Advantage of Saving for Transition-to-Retirement

The advantage of saving up to transition-to-retirement is that it gives you tax at the rate of 0%. Two main things to consider when saving up to transition-to-retirement are the minimum and maximum amount that grows from your balance. And the minimum and maximum are 3% to 10%. In the next year it would be 4% as a minimum, and when you are in pension mode, you can have a maximum of as much as you want. You can withdraw as much as you want from your pension fund.

How to Initiate Transition-to-Retirement

To initiate a transition-to-retirement and pension amount, you don't have to notify the tax office. You just need to fill out a complete minute which needs to be signed by the trustees and the tax office will be notified at the time of the tax declaration. So at that point, it's a trustee decision regarding when to start and end transition-to-retirement.

I hope this information helped, and there' more information to be found on our site at: www.australiansuperfinder.com.au

All information on this website is of a general nature only. We have not taken into account your financial situation, needs or objectives. You need to make up your own mind and ascertain yourself if it is right for you. We recommend you read the product disclosure statement(s) and the financial services guide before making any financial decision.

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