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Setting up Transition to Retirement pension

Discussion in 'Superannuation, SMSF & Personal Insurance' started by ramsofts, 7th Jun, 2009.

  1. ramsofts

    ramsofts New Member

    Joined:
    7th Jun, 2009
    Posts:
    2
    Location:
    Sydney, NSW
    I will be 60 in October and want starts a transition to retirment pension in my SMSF. My accountant quoted me $1500-$2000 to convert my accumulation account to a pension account. I am just wondering why should I be paying that much. I can see the documentation can be easily done on line. E.g using trustdeed.com.au for $256. Is these web site safe ? Any one has experience in using those sites.
     
  2. Superman

    Superman Well-Known Member

    Joined:
    6th Nov, 2007
    Posts:
    343
    Location:
    Gold Coast, QLD
    The documentation itself is important, however it is normally the advice that goes along with it that is even more important.

    I cannot comment on the 'safety' or accuracy of the documentation provided by trustdeed.com.au as I have not seen their documentation and if it is flexible or suitable to your situation and your current trust deed.

    I would suggest that you commence your transition pension on the 1st of July 2009 however don't draw a pension payment until turn 60 in October. This way the pension payment will still be non-reportable and tax free and your accountant can use your member balance as at 30 June 2009 which saves time re-calculating it in October (this may explain some of the cost as technically your balance needs to be worked out at the time you commence the pension).

    Some of the cost may be attributable to obtaining valuations of assets (i.e. property)? The number and complexity of your SMSF investments will also likely impact the cost.

    I am also wondering why you have not previously been advised to commence a transition pension when you turned 55 - even though you still have to report the income, you will likely have some tax free amount and the taxable amount attracts a 15% rebate - effectively lowering your overall personal tax. As I mentioned previously I don't know your overall situation - but I am just throwing it out there.

    One thing I would say is to ensure the pension documentation allows for your transition pension to automatically convert over to a 'normal' pension without the 10% limit once you have a change in your employment situation or actually retire.

    I would just ask your accountant the question regarding the cost - if he gives you an answer you are satisfied with, then all good, otherwise get a second opinion - preferably from someone who specialises in the area.

    Feel free to keep us up to date with your progress.
     
  3. ramsofts

    ramsofts New Member

    Joined:
    7th Jun, 2009
    Posts:
    2
    Location:
    Sydney, NSW
    Thanks for the prompt reply. I usually do not get any advice from my accountant. I normally check with him when I need to do something different. I usually get my information from reading newspapers and magazines. I knew I had to do something as I am turning 60. I'll take the issue with my account tomorow. By the way my superfund is quite simple and my investments are only in listed shares and term deposits.