Show download pdf controls
  • Starting an income stream at 60

    Circumstances

    Chris, Rob and Jan are all 60 years old and want to start receiving an income stream from their SMSF.

    1. Rob has two jobs and will be leaving one job shortly but intends to keep working in the other job for many years.
    2. Jan has one job and intends to keep working until she is 65.

    Results

    Individual super fund members can receive an income stream when they meet a condition of release.

    1. Chris retired from his job on 1/7/2017 and never intends to work again. Chris has met a condition of release because he is over 60 and has retired from permanent employment. He can start an account-based income stream and his fund must make the minimum annual payments required by law which are based on his age. There is no maximum payment amount. The fund must lodge a Transfer balance account report (TBAR) to report the starting value of the income stream.
    2. Rob has two jobs. He retires from his first job on 30 September 2017 and has met a condition of release because he has reached preservation age (60) and is retired. Rob can start an income stream and his fund must make the minimum annual payments required by law. There is no maximum payment amount. Rob's fund must lodge a Transfer balance account report (TBAR) to report the starting value of the income stream.

    As Rob is still employed and his employer is paying super guarantee payments to his Super fund, the contributions must go into his accumulation account. When Rob retires from his second job then he can start a new retirement phase account-based income stream. Rob's fund must then lodge a Transfer balance account report (TBAR) to report the starting value of the second income stream.

    Alternatively, Rob can commute his existing retirement phase account-based income stream back to accumulation phase and start a new account-based income stream with the combined value upon retiring from his second job.

    Rob's fund would be required to report the commutation event of the existing account-based income stream and the starting of the new account-based income stream on the Transfer balance account report.

    1. Jan is still working but she has reached her preservation age. This means she can apply for a transition to retirement income stream (TRIS). Her annual income stream payments must be within the minimum and maximum amounts required under the TRIS rules. Jan's TRIS is not in the retirement phase at this point and her fund will not be required to lodge a Transfer balance account report.

      If Jan continues her TRIS into retirement and she notifies her fund when she retires, the SMSF will be required to lodge a Transfer balance account report at that time. A TBAR would also need to be lodged if Jan turns 65 before retiring.

    See also:

      Last modified: 06 Jul 2018QC 46666