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Retirement Income Streams

Retirement Income Stream ProductsAdvantages of retirement income stream products

Income from retirement income stream products might give you:

  • tax concessions and
  • favourable treatment under the means tests applied by Centrelink when working out how much (if any) age pension you will get.

Your individual circumstances, as well as the characteristics of the different retirement income stream products, will also affect your tax and your entitlement to the age pension.

These advantages may affect your retirement income, so keep them in mind when you're making a decision or talking to your adviser. Working out tax and social security can be extremely complex and you should get advice from Centrelink and a specialist tax adviser about your particular situation.

Review your situation regularly

Remember that retirement is long term and the amount of income you get will probably change over time. It's a good idea, therefore, to review your situation regularly or get your adviser to review it for you.

Pension or annuity? What's the difference?

Retirement income stream products are either pensions or annuities. The main difference is that:

  • Pensions are only available from superannuation funds and can only be purchased with superannuation money (that is money paid out from a superannuation fund or retirement savings account. Money from these sources is known as an eligible termination payment or ETP)
  • Annuities can be purchased from life insurance companies using superannuation money or, in some cases, other savings.

Fact sheets and a comparison of retirement income stream products

ASIC has Fact Sheets available that will give you a basic understanding of how retirement income stream products work. Read them along with information from your superannuation fund, life insurance company or adviser. If necessary, use them as the basis for questions to ask your adviser about your own situation.

Click Here to see the ASIC Fact Sheets.

Copyright ASIC, 9 November 2004. http://fido.asic.gov.au/fido/fido.nsf/byheadline/Retirement+income+streams?openDocument#Advantage

This article is not a substitute for independent professional advice. We do not warrant the accuracy, completeness or adequacy of the information or material in this article. All information is subject to change without notice. We and each party providing material displayed in this article disclaim liability to all persons or organisations in relation to any action(s) taken on the basis of currency or accuracy of the information or material, or any loss or damage suffered in connection with that information or material. You should make your own enquiries before entering into any transaction on the basis of the information or material in this article. Please ensure you contact us to discuss your particular circumstances and how the information provided applies to your situation.

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