Previously known as account based pensions, a retirement phase pension is an investment which pays you a regular and tax effective income in retirement.

How do retirement phase pensions (RPPs) work?

You invest money from a superannuation fund into an RPP. The RPP then pays you a regular income comprised of earnings and capital until your account runs out.

The amount a person can invest in a RPP is limited by transfer balance caps. Currently. the general transfer balance cap is $1.6 million.*

*As at August 2017. Please speak with your financial adviser to confirm the up-to-date transfer balance cap.

The annual income you choose must be at least equal to the Government’s prescribed minimum, based on your account balance.

What are the tax advantages of RPPs?

  • Lump sum tax is deferred when you transfer superannuation money to an RPP. Once you are 60+, lump sum tax will be eliminated.
  • No tax on earnings in the fund.
  • Little or no tax on RPP income. In fact, once you are 60 or more, you will pay no tax on RPP income.

Call Invest4Life on (07) 5456 1355 to discuss pensions with our Financial Advisers.

Disclaimer: This information has been produced by Australian Unity Personal Financial Services Ltd (‘AUPFS’) ABN 26 098 725 145, of 114 Albert Road, South Melbourne, VIC 3205, AFSL & Australian Credit Licence 234459. Any advice in this document is general advice only and does not take into account the objectives, financial situation or needs of any particular person. It does not represent legal, tax, or personal advice and should not be relied on as such. You should obtain financial advice relevant to your circumstances before making investment decisions. AUPFS is a registered tax (financial) adviser and any reference to tax advice contained in this document is incidental to the general financial advice it may contain. You should seek specialist advice from a tax professional to confirm the impact of this advice on your overall tax position. Nothing in this document represents an offer or solicitation in relation to securities or investments in any jurisdiction. Where a particular financial product is mentioned, you should consider the Product Disclosure Statement before making any decisions in relation to the product and we make no guarantees regarding future performance or in relation to any particular outcome. Whilst every care has been taken in the preparation of this information, it may not remain current after the date of publication and AUPFS and its related bodies corporate make no representation as to its accuracy or completeness. Published: August 2017 © Copyright 2017