by Duc Hong
Account Based Pensions can provide a regular income stream once a member satisfies a condition of release. If the member is over age 65, or has reached their preservation age and retired, the income stream will be treated as a Retirement Phase Pension.
Income and assets supporting Retirement Phase Pensions are exempt from tax. For Transition to Retirement Pensions where the member has reached their preservation age but is under age 65 and still working, the income and assets supporting that pension remain taxable.
Regardless of the pension type, there are a number of important elements to consider when commencing an income stream:
While the operation of Account Based Pensions is straightforward, there are many other issues to consider and implement.
We hope all our readers have a wonderful Christmas and prosperous New Year. This is our final article for 2020, we look forward to providing you further articles from mid-January next year.
Keep up to date with all the latest SMSF news and updates by subscribing to SMSF Engine’s newsletter.