Transition to Retirement Strategy

What is a Transition to Retirement Allocated Pension?

Under new rules, a member is now allowed to commence an allocated pension from their superannuation fund once they are at least 55 years of age even if they are still working. This type of allocated pension is known as a “Transition to Retirement” Allocated Pension. If you are over 55 and have retired then this type of allocated pension is not available, and you would simply start a normal allocated pension in this case.

Differences between a normal Allocated Pension and a Transition to Retirement Allocated Pension

Essentially there are two main differences between a transition to retirement allocated pension and a normal allocated pension namely:

• A normal allocated pension is commenced when you retire (and are at least 55). A transition to retirement allocated pension is commenced whilst you are still working (and are at least 55). 

• With a normal allocated pension you can cash out lump sums whenever you like. With a transition to retirement allocated pension you cannot cash out lump sums and can only take a pension stream. You can convert a transition to retirement allocated pension to a normal allocated pension when you retire, enabling you to then cash out lump sums.
  
  For further information regarding the above strategy please contact:  wealthcreations@blackmoreinvestments.com.au