Getting ready to retire

Your next chapter is about to begin

This is one of the most exciting times in your life. Whether you're thinking about transitioning into retirement, or you're ready for retirement, we're here to help you every step of the way.

Your options for retirement

What can you do with your super as you approach retirement?

When you are eligible to access your super, you have options:

Open an Income account and start receiving regular payments from your superannuation
Withdraw as cash, all at once or in stages
Leave your super where it is for a while

You could also choose a combination of the three options above to suit your needs.

1. Receive regular payments

This is the most popular way to turn your super into a regular income stream. You can setup an Income account by transferring all or some of your money from your Super Savings Accumulation account to a Super Savings Income account.

You can then setup regular payments from your Income account to your bank account. You can choose the amount and frequency of these payments.

Here are some of the pros and cons of this approach.

Benefits

Potential tax benefits: You may be able to get tax benefits to help you grow your super.
Replace employment income: Depending on your age and employment status, an Income account could be a good option to replace or boost your income.
Invest for your future: If markets have dipped, you may decide it's a bad time to withdraw your money. With an Income account, your money stays invested.

Drawbacks

Withdrawal requirements: The Federal Government has set minimum and maximum (for Transition to retirement income accounts only) withdrawal amounts for your income stream each year. This is a percentage of your balance, based on your age.
Transfer limit: There is a limit on how much can be transferred to a tax-free retirement phase income stream.

Learn more about the benefits of opening an income account.

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2. Withdraw as a lump sum

You can keep all or some of your money in your super account and make lump sum withdrawals into your bank account.

You can withdraw as much as you need, whenever you need it.

Here are some of the pros and cons of this approach.

Benefits

Reduce or clear your debts: Withdrawing a lump sum may let you clear debts, or pay other necessary expenses, which could save you money in the long run.
Withdraw money in stages: You could withdraw a partial lump sum at regular intervals, or as you need it. This may have tax and Centrelink benefits, depending on your age.
Invest outside super: You may want to take some or all your super savings and invest it elsewhere, such as a low-fee savings account, a term deposit or an other investment option.

Drawbacks

Splurge risk: You may be tempted to overspend or live beyond your means until the money runs out.
Lower future income: Spending your super savings now will reduce your retirement income in the future.
Pay more tax: You may have to pay tax on investment earnings outside super. Investments can grow tax-free in a retirement income stream.

Make a one-off lump sum withdrawal from your super account.

Withdraw

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3. Leave your money in super

You can leave your money in your Super Savings Accumulation account for as long as you want, even after you're allowed to withdraw it.

This gives you more time to make a retirement decision and your money will stay invested in the meantime.

Here are some of the pros and cons of this approach.

Benefits

You'll have more time: This will allow you to consider your options and get advice. Australian Retirement Trust offers personal financial advice and educational seminars, with the cost included with your membership.
You can still contribute: Depending on your age and employment status, delaying your decision may mean you still have the option to boost your super balance.
You can avoid selling in a downturn: If markets have dipped, you may decide it's a bad time to withdraw your money.

Drawbacks

Pay tax on investment earnings: While your money remains in your Accumulation account, investment earnings are taxed at up to 15%. This may be more than the tax you would be charged with a Retirement income account.

Simple actions you make today can boost your super and help prepare you for your retirement.

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Speak with a financial adviser

As an Australian Retirement Trust member, you have access to financial advisers to help you prepare for retirement. The cost of advice about your Australian Retirement Trust account is included with your membership.

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