February 08, 2021

Luke on 2CC – Transition to retirement pension

17 minutes

Have you heard about this pathway to retirement?

Financial Planner Luke Smith joined 2CC Talking Canberra 1206AM in The Money Show which aired on Friday 29 January 2021. This week’s topic: Transition to retirement pension – what is it and how does it work?

In recent weeks Luke has looked at how to boost your retirement savings before you retire from work. This week Luke explores a pathway to retirement, called the ‘transition to retirement’ pension. While many people who are exploring their retirement options might have heard of this, few really understand how it can work effectively for them, until they seek advice.

Key highlights include:

When it comes to retirement – most people would like to retire sooner.

What does retirement mean to you? For Luke it means being able to afford to spend your time as you’d like to.

The modern idea of retirement is not all or nothing, now many retirees are happy to work part time. So with this in mind, if you reduce your work hours, you can top up your earnings with a payment from your super, through a transition to retirement pension.

How much of an income can you take as a pension payment from your super? What is the minimum or maximum you can take? There are rules around how much you can have, so it’s important to plan your transition to retirement to make sure it financially works for you.

Transition to retirement might also be available for people who find themselves with reduced hours, through no fault of their own and through an event like Covid.

Can income from a transition to retirement pension be tax free? It depends on your age and a few other things!

A transition to retirement pension can also be used to pay down debt or receive a tax deduction by putting money back into your super or your spouses super. So it can be more than just an income strategy, depending on your situation.

If you haven’t made super contributions, you can use the catch up legislation to boost your super before you fully retire, using potentially tax free money from your transition to retirement pension, while you work reduced hours.

Luke’s top tips using the transition to retirement pension strategy and strategies you might consider. It’s also an opportunity for people who have defined benefit super fund and a spouse who doesn’t.

A free appointment offer to talk about your own financial planning goals. Everyone has different goals and financial planning advice can help you achieve them more effectively, especially when you link different strategies.

Listen to the Podcast right now

https://www.envisionfinancial.com.au/wp-content/uploads/2021/02/The-Strategy-Stacker-Luke-Talks-Money-05022021.mp3

Also available on Apple Podcasts and Spotify ‘The Strategy Stacker – Luke Talks Money’

Do you need advice on the transition to retirement pension pathway?

Transition to retirement can be about securing an income and reducing your work hours. It can also be about boosting your super or paying down debt. Seek advice if you have questions.

Luke as a Financial Planner can help you set up a financial planning strategy to help you achieve your personal financial goals. Retirement planning can be complicated, but the good news is you can make an appointment to speak with Luke about your superannuation and retirement strategy – including the transition to retirement pathway.

Envision 2CC offer: Your first appointment is at our cost. Make an appointment to confidentially discuss your own investment, super or retirement goals. Call Envision Financial Services on 6260 4749. You can also use our contact us form to make an appointment for a confidential discussion about your situation.

Luke will return to talk about financial planning on 2CC next Friday. You can also catch up with The Strategy Stacker – Luke Talks Money podcast. We look forward to your company again.

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By Luke Smith