Our Pre-retirement Super Pension allows you to receive regular, tax-effective pension payments.

Members generally use a 'Pre-Retirement Super Pension to:

  • Boost super by making tax-effective super contributions through a Transition to Retirement (TTR) strategy
  • Wind back their working hours and top up their take-home pay

How to increase your super balance

There are many ways to build your super balance in the lead up to retirement. Making additional contributions through salary sacrifice, after tax contributions or reviewing your investment options can help. If it’s unrealistic for you to make additional contributions into super, you may benefit by implementing a Transition to Retirement (TTR) strategy.

How a TTR strategy can help boost your super

A Pre-retirement Super Pension allows you to draw down part of your super, as regular pension payments, while you’re still working. This cash flow then allows you to ‘salary sacrifice’ (make pre-tax payments from your employment income into your super) without reducing your take home pay. Making salary sacrifice contributions can be a great way to reduce the tax you pay on your salary.

Minimum pension payments

You must draw a minimum level of pension payments each financial year - the amount depends on your age when you first open your account, and is reset 1 July each year.

Temporary reduction of minimum pension payments

The Government is temporally reducing the minimum drawdown requirements for account-based pensions (such as the Pre-retirement Super Pension) by 50% for 2019-20 and 2020-21.

This measure may benefit retirees by reducing the need to sell investment assets to fund minimum drawdown requirements.

You don’t have do anything to qualify for the reduced drawdown rates. These will be available to anyone with an account-based pension.

Note: During the first financial year of your account, the minimum payment is proportional to the number of days left until 30 June.

Drawdown rates for 2019-20 and 2020-21

When you first open your account, and on 1 July each year thereafter, if you are aged... The minimum amount of your account that must be drawn is...
 Under 65  2%
 65 to 74  2.5%
 75 to 79  3%
 80 to 84   3.5%
 85 to 89   4.5%
 90 to 94  5.5%
 95 or more  7%

Drawdown rates for all other years

When you first open your account, and on 1 July each year thereafter, if you are aged... The minimum amount of your account that must be drawn is...
 Under 65  4%
 65 to 74  5%
 75 to 79  6%
 80 to 84   7%
 85 to 89   9%
 90 to 94  11%
 95 or more  14%

How the lower drawdown rates could help you

The Government has put together an example of how a retiree might use the reduced drawdown rate to preserve their capital while still drawing an income from their account-based pension.

See worked example 

Maximum pension payments

You cannot draw more than 10% of your account in any financial year. For the first year, the maximum limit is calculated at the date your account starts - you must also choose whether to receive:

  • the maximum 10% amount, or
  • some lesser amount being not less than the minimum amount.

Your maximum payment amount is then recalculated on 1 July each year.

No lump sum withdrawals

You generally cannot make any lump sum withdrawals unless the money is:

  • paid from an unrestricted non-preserved benefit - a minimum of $1,000 applies and the withdrawal does not count towards your 10% maximum limit
  • used to make a payment split under family law, or
  • used to pay a superannuation surcharge debt or an excess contributions tax assessment to the ATO.

Speak with a retirement specialist

Instead of sifting through information to find out what is relevant to you, ask to speak to a retirement specialist – no sales pitches – just a phone discussion with someone who can provide relevant information in plain English. There is no extra cost to use this service, as the cost is included in the fees that apply to all super accounts. This team is accessible between 9am and 5pm (AEST/AEDT) on 1800 222 071.

You can also use this online form to request a callback.

Use online form

 

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