Barry has decided the time is right to retire but he’s unsure of the process when it comes to advising his SMSF.
I hope you can help. My wife and I are both 62 years old, have our own self-managed super fund (SMSF) and have been in transition to retirement since July 2012. We are going to retire soon and would like to know what is the process. Do I just write to our SMSF and advise of our retirement? Do I have to fill out any forms for the Government? Do I need to write to anyone else to advise of our retirement? I cannot find any information on the actual process.
A. It is important that any changes in your SMSF are well documented. Given that you have already started a transition-to-retirement pension, most of the necessary paperwork, such as actuarial certificates, should be in place.
Once you have chosen your pension and are certain it meets the minimum pension standards noted below, you should advise your fund’s trustee of your decision.
Minimum pension standards
- the pension must be account-based, except in limited circumstances
- you must pay a minimum amount at least annually
- you cannot increase the capital supporting the pension using contributions or rollover amounts once the pension has started
- a pension being paid to a member who dies can only be transferred to a dependant beneficiary of that member
- you cannot use the capital value of the pension or the income from it as security for borrowing
- before you can start a pension, you must pay a minimum amount in certain circumstances.
Before making any financial decisions, you should consult a financial advisor or accountant. He or she will also be able to advise you of the process and complete any necessary paperwork. There will be a fee for this service.
Once you reach Age Pension age, you should apply for the Age Pension, which is assessed and determined on your income and assets. If you do not qualify for an Age Pension, you may still be eligible for a Commonwealth Seniors Heath Card, which entitles you to many worthwhile concessions.