E14: Retirement Income StreamS

You’re planning to retire, and you’ve been built up money in superannuation for many years. What are the ways to fund your retirement years so you get a regular income?

This episode covers retirement income streams with Justin Bott from Services Australia Financial Information Service.

We’re talking about when income saved through super becomes an income stream. It used to be called an “allocated pension” but it now referred to as an account based pension. Its job is to pay you a regular income from your superannuation investments.

Having an account based pension doesn’t necessarily mean you won’t get the government pension or part pension. It depends how much you receive, if your assets are too high, you may not be eligible.

When you meet a condition of release, that is when you reach retirement age, you can access all of your super. After sixty, you can access your super tax free. You can use it to pay off your mortgage or other debts. But there are tax advantages to rolling it over to a retirement income stream.

It’s important to know that If you are over the aged pension age, you can still work and earn a certain amount without it affecting your pension under what’s called ‘the work bonus’. You can earn $300 a fortnight and it isn’t counted.

If have investment income, but the income dries up you can apply for a pension, but payments aren’t retrospective. As always it’s a good idea to seek independent financial advice.

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