Superannuation Income Stream Over 60

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6 Comments

  1. Robert Boni

    Thank you for your article on Income streams for over 60s. I’m 63 yo. I was made redundant in my full time job on 30 June. I was cashed out. I then converted my TTR into a retirement income stream with my industry super provider. After 3 weeks, I picked up a casual job with another organisation. Then last month another casual job with a different company with a different role. Am I still eligible to remain in my income stream? Will the ATO insist I pay tax its earnings? Your articles suggest not. Can you confirm?
    Robert

    on a super income stream (not TTR).

    Reply
    • Chris Strano

      Hi Robert
      A person has unlimited access to their superannuation savings upon meeting a superannuation condition of release. One such condition of release is ‘ceasing an employment arrangement after age 60’. It appears you have met this condition of release, meaning your retirement savings up until that point can be held in an ordinary account based pension (i.e. not ttr) whereby all earnings from investments within the account are received tax free. Also, as you are over age 60, all pension payments will generally be tax free.
      Commencing a new job does not negate the fact that you have already met a condition of release and will not impact your income stream. However, any subsequent contributions made to superannuation since commencing a new job (e.g. employer SG contributions) will not be accessible until you meet a condition of release again.
      Put simply, you are eligible to remain in your pension and you will not need to pay tax on earnings from assets supporting the pension.

      Reply
  2. Roger

    Hi Chris, helpful article, thanks. I’m 59 and looking at my options once I turn 60. I understand that for super in an accumulation account, as opposed to the pension account, the super earnings are taxed at 15%. My question is, how are the accumulation account’s earnings assessed? Is it simply the amount by which the total of the value of the account increases over the period in question?

    Reply
    • Chris Strano

      Hi Roger, all investments have either income (interest/dividends/rent/distributions) or capital growth (increase in the capital value of the asset) or a combination of both income and capital growth.
      For tax within superannuation accumulation account purposes, the income will be taxed at 15% at the end of each financial year. The capital growth/capital gains will be taxed only when the investment is sold in full or part. Capital gains are taxed at 15% within superannuation accumulation accounts; however the assessable gain is reduced by 1/3rd if the investment was held for longer than 12 months – effectively resulting in a reduced tax rate of around 10%.

      Reply
  3. Ray

    Hello Chris, thank you for an easy to understand article. I have just turned 60, working full time with Rental income and Salary Sacrificing 50% of my wages since February . I don’t have a TTR account as yet. Can I withdraw a Tax free lump sum to pay down my mortgage?

    Reply
    • Chris Strano

      Hi Ray, until you meet a full superannuation condition of release, you are unable to access a lump sum from your super. The most common superannuation condition of release is ‘Retirement’. The definition of retirement includes ‘having an employment arrangement come to an end after reaching age 60’, meaning your current role would need to end. See more about retirement here. Another condition of release is turning age 65. Until then, a TTR Pension may be available to you, which provides you with access to 10% of your super balance each year. Being over age 60, you should receive most, if not all of the income, tax free. I suggest speaking with a financial planner and/or your superannuation fund to see the options available to you and what is best for your situation.
      Thanks for the feedback too!
      Chris

      Reply

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