LUCRF Super - Pensions

• 1. Welcome toLUCRF Super SchoolTopic: LUCRF Pensions An online learning series

2. Pensions LUCRF Pensions allow you to use your super (andany other savings) to create a source of income. LUCRF Super offer two types of pensions: Transition Pension (TP), and Retirement Pension (RP). 3. Transition Pension (TP) Can be utilised by members over the age of 55who are still working. The strategy involves rolling over part of your superto a TP which will then pay you an income. This strategy can also be combined with salarysacrifice. This will help you save tax and grow yourwealth more quickly. 4. About Transition Pensionincome streams The pension income must be between 2% and 10%of the pension balance for the 2010/11 financialyear. The pension income is tax free if you are overthe age of 60. A tax offset of 15% applies if you are aged between55 and 59. 5. Advantages of having aTransition Pension More take home pay as you are receiving some ofyour super (concessionally taxed or tax freedepending on age) whilst you are still working. Less personal income tax when a TP strategy iscombined with a salary sacrifice strategy.AND 6. Advantages of having aTransition Pension Growing your retirement nest egg all pension fundinvestment earnings are tax free which means yourmoney works harder for you. 7. Retirement Pension (RP) Designed for members who have fully retired fromthe workforce or have reached the age of 65. This strategy involves placing your retirementsavings (super and non-super) into a RetirementPension (RP). 8. Retirement Pension (RP) The RP allows you to draw an income stream(regular pension payment) that has a minimumlimit with no maximum. All income received is tax free over the age of 60,with a 15% tax offset applying to those betweenthe age of 55 and 59. 9. Advantages of having aRetirement Pension Provides a regular income for your retirement,making it easier for you to plan and budget Greater potential to qualify for the Government AgePension, as Centrelink exempts part of a pensionincome stream under the income test Pension funds (just like TP) continue to beinvested with no tax on earnings. 10. Case study David is a 65 year old, single, retiree, who owns hishome. He has $150,000 in super, $10,000 in a bankaccount and $20,000 in personal assets (includeshome contents of $10,000 and a motor vehiclevalued at $10,000). 11. Case study: Assets test Under the Government Age Pension assets testDavid qualifies for a full age pension of $701.10per fortnight (or $18,228 per year) as his totalassessable assets (super, bank account andpersonal assets) are below the single, homeownerlower limit threshold of $181,750 Note: Davids owner-occupied home is excludedfrom the assets test. 12. Case study: Income test Under the Government Age Pension income test,if David converts his super into a RetirementPension (regular income), he will still receive themaximum Age Pension. If David were to keep his money in anaccumulation super fund, drawing a yearly lumpsum, he would only receive a part Age Pension. Let us show you how 13. Case study: Receiving maximumAge Pension$10,000 taken as $10,000 taken asyearly lump sum from yearly income from RP superIncome counted by $6,570$2,210CentrelinkCentrelink Age$16,841 $18,228 (maximum)Pension receivedPlease note: The table above uses Centrelink rates and thresholds effective from 1 July2010. These may change from time to time, which can alter the outcome shown. 14. How long will a LUCRF Pensionlast?It all depends on: Investment performance Level of income payments, and Money drawn from your account(e.g. lump sums etc) 15. LUCRF Pension features &benefits Regular payments to boost or replace your salary Choice of payment frequencies Market-leading products No commissions Low fees and no start-up or exit fees, and Personal and professional service 16. Find out more about LUCRFPensionsGet professional advice LUCRF Super offers personal financial adviceyou can trust. Simple advice on super or pensions isgenerally free. 17. ContactPhone:1300 130 780Email:[email protected]:www.lucrf.com.au