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Transferring existing super to an SMSF

Individuals who plan to transfer their existing super from an industry fund into an SMSF needn’t worry about going over their superannuation contribution limit.

Transferring these funds, also known as ‘rolling over’, is not considered to be a super contribution since the money is already somewhere in Australia’s superannuation system. It also does not count towards an individual’s non-concessional (after-tax) contribution of $180,000 a year (or $540,000 if using the three-year averaging provision).

Individuals can have multiple super accounts including an SMSF. However, when they transfer money from their industry fund, it is important to ensure that doing so will not forgo benefits such as cheap life and TPD (total and permanent disability) insurance.

A popular strategy to avoid having to sacrifice these benefits is to leave a minimum $5000 balance in the industry fund to keep the life and TPD policy. Industry funds will often require individuals to pay their guarantee monies into that account, however, they can transfer that out at a time that is most convenient.

Posted on 18 November '15 by , under Super.

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Transition to retirement

The transition to retirement (TTR) strategy allows you to access some of your super while you continue to work.

You are able to use the TTR strategy if you are aged 55 to 60. You can use it to supplement your income if you reduce your work hours or boost your super and save on tax while you keep working full time.

  • Starting a TTR pension: To start your TTR pension, transfer some of your super to an account-based pension. You have to keep some money in your super account so that you can continue to receive your employer's compulsory contributions as well as any voluntary contributions you may be making.
  • Government benefits and TTR: The benefits you or your partner receive might be impacted if you choose to opt for this strategy. How and what exactly will change might become clearer upon discussing this with a Financial Information Service (FIS) officer.
  • Life insurance and TTR: In some cases, the life insurance cover you have with your super may stop or reduce if you start a TTR pension – check this before making any decisions or changes.

TTR can help ease your mind as you transition into retirement but it can be a bit complex. Before you choose whether you want to use TTR to reduce work hours or save on tax, or even if you want to use TTR altogether, you should figure out how this will impact all aspects of your finances.

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