Pensions (retirement)

Redlands Superannuation Advice


Meeting your Preservation Age (55 and above)

To be eligible to convert your superannuation, you first must meet your preservation age and for those who are born prior to 30 June 1960, your preservation age is 55. For those born after this date, the preservation will gradually increase to 60. When you meet your preservation age, you are then able to convert your superannuation from an ‘accumulation phase’ into a ‘pension phase’.


Still Working – The Transition to Retirement (TTR) Strategy

If you are working (full-time or part-time), you can still take advantage of converting your superannuation into a pension phase as long as you meet your preservation age requirements.

This is a highly tax effective strategy that enables you to take advantage of the 0% tax treatment on pension versus the 15% tax treatment on superannuation. This strategy is also known as the Transition to Retirement Strategy (TTR).

While the account based pension has no restrictions on how much you can draw-down, the TTR strategy has a capped draw-down of 10% meaning a client can draw-down between 4%-10% of their superannuation account balance.

For example, a client with $400,000 can draw-down an annual amount between $24,000 (4% minimum) and $40,000 (10% maximum) from their superannuation.

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How we can HELP you

If you have reached your preservation age, we can assist you with the following:

  • Convert your superannuation into an Account Based Pension (if you have fully retired).

  • Convert your superannuation into a Transition to Retirement Pension (if you are still working).

  • Provide you with investment advice on your superannuation assets based on your investor risk profile.

  • Ensure you receive a regular pension income stream from your superannuation.


Age 55 and Still Working?

To be eligible to convert your superannuation, you first must meet your preservation age and for those who are born prior to 30 June 1960, your preservation age is 55. If you are age 55 and still working you now have the opportunity to convert your superannuation from ‘accumulation phase’ into a ‘pension phase’.

Most tax effective entity in Australia

Pensions are the most tax effective structure available in Australia and by converting your superannuation from accumulation to pension phase, you will reduce the tax rate from 15% to 0% which can save you a considerable amount in tax on your superannuation:

How you can Save Tax

As an example, a client has a super balance of $700,000 and currently has assessable income of $50,000 from interest income and dividends. Based on the 15% tax rate on super, the client will pay $7,500 a year in tax within his superannuation.

By implementing the Transition to Retirement Strategy, we now take advantage of the 0% tax environment for pensions. As such, in this example above, the client has now reduced the tax payable within superannuation from $7,500 to $0 per year. Over a 10 year period, this equates to $75,000 in tax savings by implementing the Transition to Retirement Strategy.

How we can HELP you

We can assist you with a TTR strategy by implementing the following;

  • Converting your superannuation from an accumulation phase into a pension phase.

  • Take advantage of the 0% tax treatment on earnings and/or any capital gains.

  • Determine a pension draw-down you require on your superannuation if you decide to work part-time

  • Determine the minimum draw-down on your super and salary sacrifice the difference should you decide to work full-time.

Complimentary First Consultation

Your opportunity to speak with us about beginning your financial journey.

HUB Financial identifies Risk management as an essential part of protecting your families future and provide peace of mind. By preparing families for future uncertainties and protecting their lifestyle and income. We all insure our house and our cars, but have we insured the most important things, ourselves and our lifestyle? Read More

Related Product of Interest

Want more control of your superannuation than a Self manages Superannuation (SMSF) could be right for you. You can even buy an investment property or direct shares with your superannuation. Read More

Thinking about investing? Speak with the Hub Financial team to help point you in the right direction. With so many different options such as property, managed funds and  shares. We will help you choose an investment appropriate to your goals and objectives. Read More

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1/86 Shore st West 
Cleveland Qld 4163

Hub Private Wealth Pty Ltd trading as Hub Financial Advice is a Corporate Authorised Representative of Affinia Financial Advisers Ltd ABN 13 085 335 397 AFSL No. 237857

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