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What’s a superannuation allocated pension? 

A superannuation allocated pension is started with a lump sum of money that you are paid from your superannuation account when you reach the appropriate age based on your birth year. This age is somewhere between the ages of 55-60. If you were born after 1 July 1964 you will have to wait until you are 60 to open such an account.

To be able to take your money out of your allocated pension account, you will have to have met the terms and conditions of your release to access the money. The idea of the superannuation allocated pension is to help you transition into your retirement.

The Minimums You Must Withdraw From Your Account

The older you get, the greater the percentage of the money you will have to take from your account each year to meet the terms and conditions will be. The following is a synopsis of what percentage you have to take from the account ANNUALLY as you age:

  • 55 – 64 years: 4%
  • 65 – 74: 5%
  • 75 – 79: 6%
  • 80 – 84: 7%
  • 85 – 89: 9%
  • 90 – 94: 11%
  • 95+: 14%.

Payments on these accounts can be made on a variety of schedules including monthly, quarterly, half-yearly, or yearly – depending on how your account is set up and how often you have payments coming out of the account.

Withdrawing Lump Sums

You are able to withdraw lump sums of money from your superannuation allocated pension. You are also able to roll it back to an accumulating account if you so choose.

How Long With This Allocated Pension Last?

There is no guarantee as to how long your pension account will last. The longevity of your pension plan will depend on how much you withdraw annually (note there are minimums listed above you must withdraw each year). These investments you make are not promised to have a return on them. MoneySmart’s pension calculator can provide you a rough idea of how long your funds will last.

To find out if a superannuation allocated pension is the right option for your retirement, please feel free to contact us.