Are you “Retired” by the definition to set up a Pension?

There are two types of Pensions you can set up in a SMSF which are Account Based Pension & Transition to Retirement Pension.

Many clients are confused as to which Pension they should start. However, the fact is that there is really no choice. Depending on your age and your work status, you can only set up one or another. Below table sums up the mystics behind it;

pension defintion

In order to determine which Pension to set up, the definition of “Retirement” is important.

The definition of “Retirement” will vary depending on your age. If you’re aged 60 and over, “Retirement” means you simply cease your employment. In this case the intention to return to the workforce is irrelevant.

If you’re aged between 55 and 59, “Retirement” means that at the time you ceased employment, you never intended to work again either full-time or part-time (working more than 10 hours per week).

There are several questions we get asked frequently regarding “Retirement” and we list the answers below;

Can I reduce my hours with the same employer rather than ceasing employment to be considered ”Retired”?

No, you cannot just reduce your hours to be considered retired. You MUST cease employment.

Can I return to work after retiring?

Signing a retirement declaration does not preclude you to returning to work. The declaration relates to the person’s current intention at the time of retiring. Therefore, yes, you can return to work after retiring. However, the intention to retire at the time of retiring must have been genuine.

What happens to my Account-Based Pension if I return to work?

The Account Based Pension can continue to be paid if the retiree changes his mind about remaining retired. However, If you’re aged between 55-64, you will not be allowed to set up another Account Based Pension whilst working. If you wish to set up another pension, it will have to be Transition to Retirement Pension (TRAP).

I am less than 55 and Retired. Can I access my super benefits?

No, if you’re under 55, you cannot gain access to preserved super benefits because of retirement.

Superhelp offers free Pension Set Ups for clients over 60. Please call us now on 1300 736 453 if you would like to find out more about this great offer.

 

Article Disclaimer: This information should not be considered personal financial advice as it is intended to provide general advice only. The article has been prepared by Superhelp Australia Pty Ltd without taking into account your personal objectives, financial situations or needs. 
 
The information contained in the article may not be appropriate to your individual needs therefore you should seek personal financial advice before making any financial or investment decisions. 

 

Book Your Free SMSF Consultation

Book your free consultation with me to find out if SMSF is right for you. If you have any other questions, we are happy to help!

 

Sandra - SMSF Advisor

4 + 5 =

Can SMSF Lend Money to a Third Party?

Introduction: Navigating the complexities of Self-Managed Super Fund (SMSF) regulations is crucial for trustees who aim to maximize their fund's potential while remaining within the legal framework set by the Australian Taxation Office (ATO). A common question that...

Can SMSF Lend Money?

The Rules and Opportunities around SMSF lending Self-managed super funds (SMSFs) offer Australians a unique way to control their retirement savings, but with great power comes great responsibility, including understanding the legalities and regulations surrounding...

Can SMSF Borrow Money? Exploring the Possibilities and Limitations

Self-Managed Super Funds (SMSFs) have become a popular choice for Australians looking to take control of their retirement savings. As trustees seek to maximize their fund's potential, a common question arises: Can SMSF borrow money? The answer is yes, but it's wrapped...

What Does SMSF Stand For? A Deep Dive into Self-Managed Super Funds

When it comes to planning for retirement, Australians have a variety of superannuation options available to them. Among these, one option stands out for those who seek more control over their retirement savings: the Self-Managed Super Fund (SMSF). But what exactly...

How much do you need to retire in Australia?

Retiring in Australia can be a dream come true, but it's important to have a clear understanding of how much money you will need to support yourself during your golden years. The amount you need to retire in Australia depends on several factors, including your...

SMSF Director ID

The SMSF (Self-Managed Super Fund) Director ID is a unique identifier that is assigned to individuals who act as directors of SMSFs. This identifier is used to monitor and regulate SMSF trustees and ensure that they are fulfilling their obligations under the...

What types of people have an SMSF?

There are many different types of people who have an SMSF. Some of the most common include: Small business owners: Many small business owners choose to set up an SMSF to help manage and invest their retirement savings. This allows them to have more control over their...

Commercial SMSF Loans – What you need to know

Securing a commercial loan for an SMSF can be complex due to the variety of lenders and options available. Whether you're a first-time borrower or an experienced borrower, it's important to understand the nuances of the loan process when applying for a commercial SMSF...

Is SMSF right for you?

Before deciding to set up an SMSF, it is important to consider whether it is the right choice for you. An SMSF is a type of superannuation fund that is run by its members, who are also the trustees. This means that the members have complete control over the investment...

How to Complete Your SMSF Tax Return

SMSF trustees are responsible for managing their own superannuation funds, which means they are also responsible for ensuring that their SMSF complies with all the relevant laws and regulations. One of the most important compliance requirements for SMSFs is the...

Contact Us

SuperHelp is located in Macquarie Park, NSW however we work with clients all around Australia.

info@superhelp.com.au

1300 736 453

PO Box 1906 Macquarie Centre NSW 2113

M-F: 9am-5pm, S-S: Closed

11 + 14 =