The ultimate objective of any superannuation fund is to pay your money back out to you at some point – such as when you retire. Until then, it's important that you don’t use your super to meet personal expenses or invest in things not allowed by super law.
To start drawing on your super, there are a few simple steps:
- Let us know that you’re about to do so. In an SMSF, this is often done by starting a "pension." An SMSF pension is quite different to the age pension in that it's not provided by the government or a product you buy from a financial institution. It doesn't mean you sell down the fund's investments to move your money somewhere else. It is simply the name given to the way you draw money out of your SMSF. Tell us when you want to start a pension and we will then confirm with you that you meet all the rules to do so. We'll also prepare the documentation you need. Don't forget that this will change the administration fees you pay for your SMSF as there is extra work we need to do once your fund starts to pay a pension.
- If you’d like to receive your pension payments on a regular basis, set up a regular transfer from your SMSF cash account to your personal bank account.
- If you’d rather just transfer money to your personal account as and when you need it, feel free to just make ad hoc transfers online.
- Make sure you take the right amount over the financial year. For example, once you start a pension, you have to take at least a minimum amount each year. If you're still under 65 and not yet fully retired, there may also be a maximum amount you're allowed to take each year.
- Monitor where you’re up to with your pension payments by logging into the Heffron Administration Portal
The documentation we prepare for you each year will tell you what the limits are for that year and we'll also remind you towards the end of each year if it looks like you might fall short of the minimum. In either case, include information in the transaction that make it clear to us what the payment is (e.g. "Monthly pension for Peter").
How can Heffron help you?
If we look after your SMSF, it's as simple as letting us know you want to start a pension. We'll have some extra questions such as:
- when you want it to start
- with how much (all your super? just some?)
- whether it should continue to your spouse when you die
- what condition you've met to be allowed to access your super (this is called a "condition of release")
If you want to read more about superannuation pensions, read our comprehensive guide here.
If you're an accountant looking after a number of SMSFs, the Heffron Super Toolkit gives you the ability to prepare your Pension Establishment documentation yourself. Our quick and easy-to-use tool steps you through the process.
Or we can do it for you. Simply complete the form below to get started.
Who is this recommended for?
Heffron prepares all the documentation required to commence an account-based pension or transition to retirement income stream from a self managed superannuation fund.