• Transition to retirement from age 56

  • You could save thousands of tax dollars
  • ...by converting your super account into an Australian Catholic Superannuation transition to retirement pension account.

    Members who are aged 56 years or more, and who are still working, have the potential to save thousands of dollars in superannuation tax.

    For most people, superannuation enjoys several tax advantages over many other forms of saving. That does not mean, however, that superannuation is tax-free—some Government taxes do apply.

    On the other hand, if those very same funds are transferred from an accumulation-style superannuation account into a transition to retirement account based pension account, there is currently no tax on investment earnings and no tax on capital gains.

    No tax on investment earnings

    The example below shows how much difference this tax saving can make in just one year. Each year, the tax saving stays in your pension account, adding to your retirement savings, year after year.

      $350,000 balance in a
    SUPER account
    $350,000 balance in a
    PENSION account
    Investment return*
    (Assume 6% pa after fees but before tax)
    $21,000 $21,000
    Tax on investment earnings*
    (Year 1)
    Up to 15%, or $3,150 Nil
    Earnings available to compound As low as $17,850 $21,000

    *This is an example only. Actual investment returns and taxes vary depending on the investment option selected.

    Potential tax savings are just one of the benefits of converting your superannuation into a transition to retirement account based pension account.

    Many people also like the idea of the increased flexibility the pension provides, including access to up to 10% of your pension account balance, increased capacity to salary sacrifice, and more.

    I like the idea...

    ...that I can set up my pension account by transferring funds from my superannuation as soon as I turn 56 years of age, even if I am still working.

    ...that I can set up my pension account with a minimum transfer of $25,000 from my super account.

    ...that once my funds are in the pension account, I'll pay no capital gains tax (CGT) should my funds increase in value*.

    ...that with my pension account, I can choose to receive my pension payments monthly, quarterly, twice a year or annually, to suit my needs.

    ...that with regular payments from my pension account, I may be able to afford to salary sacrifice more into my super account.

    ...that with a transition to retirement account I can withdraw a maximum 10% of my pension account balance each year, for whatever purpose I choose.

    ....that unlike many other investments, I'll pay no tax on the investment earnings on my funds.

    ...that between age 56 and 60 years my pension income is added to other income for tax purposes, but I'll receive a 15% tax offset through my tax return.

    ...that unlike many other investment options, I'll pay no personal income tax on pension payments made to me after age 60.

    ...that whatever investment option I choose, the investments will be managed professionally for me.

    I also like the idea...

    ....that I can receive tailored personal financial planning advice before I set up my transition to retirement pension account to make sure it's appropriate for me.

    Need help to make these ideas
    become a reality for you?

    Call us to arrange a meeting with a financial planner to discuss ideas, options and your financial situation.

    Call us
    1300 658 776

  • How Nev and Carole are saving tax to achieve their retirement dreams

    • Nev and Carole's transition to retirement storyNev (56) is a full-time teacher and Carole (49) works part-time as a school librarian.

      They're selling an investment property with no capital gains tax consideration. They have an investment loan and a mortgage over their own home. An overseas family holiday and some home renovations are also planned for later this year.

      Their current lifestyle expenses are around $70,000 pa (excluding loan repayments). Nev has a medical condition that is stable and their general insurance cover is up to date.

      Both of their Wills are old, but still valid.


      • Their main goal is to generate the same net income until their holiday and renovation costs are covered and then direct more savings into their superannuation.
      • They want to live a comfortable life and travel. To achieve this they need to reduce tax and save more for their retirement.
      • They also want to remain on track to retire at age 65.

      Financial situation

        Nev Carole
      Annual gross income   $105,000 $70,000
      Superannuation account balance   $383,000 (in two super funds) $130,000 (in two super funds)
      Insurance   Cover in two super funds Cover in two super funds
      Savings   $20,000
      Investment property   $500,000
      Total liabilities   $482,000

      Advice solution

      • Their planner advised the couple to use the proceeds of the sale of their investment property sale to clear the outstanding loans.
      • Nev rolled over a portion of his second super fund to boost their transition to retirement strategy, however, he has kept separate accounts in both super funds and the existing insurance benefits.
      • It was recommended that Carole extend the benefit payment period of her income protection insurance (temporary salary continuance / TSC)  to cover her to age 65. It was also recommended that her superannuation and insurance benefits be rolled into one fund.
      • Establishment of a transition to retirement pension (allocated pension) was recommended for Nev.
      • Both members were advised to increase their salary sacrifice to the maximum amount allowable under their employment arrangements.
      • Part of their surplus income is to be invested into super via after-tax contributions. This will allow them to stay on track with their retirement savings strategy.
      • The appropriate investment choice for their superannuation and transition to retirement pension was provided.
      • Spouse superannuation splitting will also commence in the new financial year.
      • Their general insurance cover will need to be reviewed when their home renovations are completed. Travel insurance cover is to be arranged for their overseas holiday.
      • Both Nev and Carole will need to review their Wills and discuss Enduring and Medical Powers of Attorney with their legal professional.
      • A review of their financial plan is to be undertaken in 2014, when the contribution limits/caps are expected to increase.

      Member benefit/Value of advice (per annum) 

      • $130 savings in administration fees.
      • $8,400 reduced income tax.
      • $8,060 increase in pre-tax superannuation savings, plus $52,000 increase in after-tax superannuation savings when the loans were repaid and renovations completed.
      • The couple now also have adequate and appropriate insurance cover in place to protect their assets, health and family.
      • Their estate planning has also been completed, so all the loose ends are now tidied up.
      • We will send out a review invitation next year.

      Cost of advice (as at Jan 2013) = $2,380

      Need help to save tax and achieve
      your retirement dreams?

      Call us to arrange a meeting with a financial planner to discuss ideas, options and your financial situation.

      Call us
      1300 658 776

      Disclaimer: This example is an abbreviated summary of an actual financial plan prepared for a current member of the Fund. Member names have been changed and other confidential personal and financial details have not been disclosed to protect member privacy. This example is provided as general information only. It does not take into account your personal objectives, financial situation or needs. As a result, you should consider its appropriateness to your situation and obtain independent financial advice before making any decisions about your own financial arrangements or investments. Australian Catholic Superannuation's financial planning services are provided through an arrangement with Industry Fund Services (AFSL 232514).

  • Need help to save tax and achieve your retirement dreams?

    Call us to arrange a meeting with a financial planner to discuss ideas, options and your financial situation.

    Call us

    1300 658 776

  • Nev and Carole's transition to retirement story 

    Nev and Carole's story

    Nev and Carole want to live a comfortable life and travel. In order to achieve their dreams, they need to save tax and increase their retirement savings nest egg.

    Read their story below to find out how we're helping them stay on track to retire at age 65.