How an Account-Based Pension works
An Account-Based Pension is ideal for members at preservation age. It's a tax-efficient way to continue to grow your super while paying yourself a regular income in retirement. You can control withdrawal amounts and frequency within certain limits to tailor it to your retirement income needs, as well as retain the ability to take lump sum withdrawals if necessary. You can also choose from various investment options so your investment strategy always aligns with your risk tolerance and investment goals. This pension plan is also tax-free for members over 60 who need additional funds to compliment income from sources such as the aged pension or other Centrelink benefits.
Regular payments and flexible withdrawals
With the flexibility of regular payments, you can choose how much and how often you receive them. You can also adjust these payments yearly to suit your financial situation. Additionally, you have the option for flexible withdrawals, enabling you to access lump sums as needed. This flexibility makes it easier to manage your finances in retirement, providing both regular income and the ability to withdraw additional funds when required.
An income stream with tax benefits
An account-based pension is a tax-effective way to use your superannuation. If you are aged 60 or above, you won't pay tax on pension payments. For those aged 55 to 59, the taxable part of the pension is taxed at your marginal tax rate, but you benefit from a 15% tax offset. It's a practical option for both managing retirement income and tax planning.
Account-Based Pension key features
Minimum investment amount
|Twice monthly, monthly, quarterly, half-yearly or yearly.
|You can choose any income amount, there are no limits.
|There are 10 investment options available, including a self-managed option, the Direct Investment option.
Lump sum withdrawals
|You can make lump sum withdrawals from your legalsuper account at any time. This is also known as a 'commutation'. Tax will be deducted from the lump sum accordingly if you are under age 60. Over age 60 there is no tax payable on lump sum withdrawals. More info can be found on the ATO page.
|You can roll back your retirement pension account in to your regular super account at any time, or you can withdraw the full value to close your account. You are not locked into a Retirement Pension account for any defined term.
Setting Up an Account-Based Pension
Here's what you need to know:
- Simple process: Starting your pension account is user-friendly and quick, simply complete the Pension membership application form within the Pension Product Disclosure Statement.
- Certified ID: You will also need to supply certified ID with your application form.
- Flexibility post setup: After establishing your pension account, you can make changes whenever necessary.
- A cooling-off period of 14 days lets you reconsider your decision without immediate consequences.
- If you're transferring funds from another fund, you may also need to complete a 'Rollover request' form. We can help you navigate this process.
Fees & costs of an Account based pension
We work hard to keep fees and costs low. Our sole purpose is to maximise our members' retirement savings. We do not pay commissions to agents and are a profit-to-member fund. Find out more about our Account-Based Pension fees and costs below.
Want more flexibility? Try a Transition to Retirement (TTR) Account
This account lets you access retirement savings while still employed, as long as you've reached preservation age. Once you turn 60, the benefits are tax-free. With a TTR, you can gradually reduce working hours while increasing retirement savings.