An AvSuper income stream gives you access to your super money over time; you can withdraw or drawdown money in a way that suits your needs. You can choose to have regular payments into your bank account or take less frequent lump sums – you can even have regular payments and take lump sums when you need more money for a holiday, car or other major expense.
It is important to have a well-structured and sustainable strategy for your income stream. Our Stucturing Income Streams in Retirement factsheet provides an overview of a common approach, and you can call us to access personalised advice regarding your own circumstances.
Note: Lump sum withdrawals may attract different taxation rules prior to 1 July 2017, but from that date will count as ad hoc payments (drawdowns) for tax purposes. Thus the drawdowns will not be subject to taxes applicable to lump sum withdrawals. For up to date information about tax, including tax rules applicable from 1 July 2017, go to www.ato.gov.au
You can drawdown as much of your AvSuper income stream as you wish* – the only limit is the amount of retirement savings you have in your account.
However, you must withdraw a minimum amount of money each financial year by law. This amount is determined according to your age and the balance of your income stream, and we will tell you your minimum drawdown amount each July. Due to COVID-19, this minimum amount can be halved for 2019-20 and 2020-21.
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How to drawdown
If you want to, you can change your payment rate up to four times each year and take out a lump sum as well as regular payments. To change drawdown arrangements, including bank details, use our change of income stream details form, or you can email us, including your name, address & member number.
You can also change which investment options the money is withdrawn from at any time by logging into Member Online or completing our Nominate or switch income stream investment options form.
You can choose which options your money is withdrawn from, using one of the following three approaches.
You can choose to drawdown from the options in the same proportions as your money is invested in those options as per your member investment choice (MIC). So if you have money invested 30% in Cash, 20% on Balanced Growth and 50% in Growth then your money will be withdrawn in the same proportions.
You can choose to have your money withdrawn from the options according to nominated priorities; that is, money will be withdrawn from the first option unless its balance is $0, then withdrawn from a second option until that also reaches $0, and so on. Of course, you can rebalance your investments periodically so that your first priority option does not reach $0.
This is often the approach we recommend since withdrawing from the Cash investment option does not realise any losses if markets are performing poorly – please read about Income Stream investment strategies for further explanations.
The third approach is to allocate a percentage to be withdrawn from each option you are invested in. While similar to matching your investment choice (the pro-rata option), this means you can withdraw differently to your investment allocations. For example, you could have money invested 30% in Cash, 20% in Balanced Growth and 50% in Growth but drawdown 80% from Cash, 15% from Growth and 5% from Balanced Growth.