Скачать или смотреть 54/11 or Aged Retirement for CSS Members - What You Need to Know to Get the Best Outcome

Learn how to evaluate your retirement options when you need to choose between 54/11 or aged retirement - and no, 54/11 is not always the best option! CSS members have many factors to consider before making a decision.


Approaching age 55 is a catalyst for many CSS members to start considering their retirement options.

A key decision to make at this juncture is whether to:
54/11
Age Retirement at 55
Continue work with current employer
Cease work with current employer and work elsewhere



In this video we explain the differences between 54/11 & Age Retirement and run through the key considerations.


When can 54/11 be accessed?


Requires resignation from CSS contributing employer prior to 55th birthday
For some this may be prior to their 50th birthday
The same calculation may be accessed following 55th birthday in the event of a redundancy
The age at which you can access your CSS as a pension is 55 and is different to standard superannuation preservation rules
Different preservation rules apply to lump sums – if non-indexed pension not taken or there are other lump sum components of your CSS such as transfer amounts.


How is 54/11 indexed pension calculated?


Does not consider Final Salary or Length of Service
Basic Contributions – these are your 5% member contributions plus investment earnings
Example Aged Based Factors can be found on our website.
Formula:
(BASIC CONTRIBUTIONS + EARNINGS) x 2.5 x AGE BASED FACTOR = INDEXED PENSION


How is CSS Age Retirement indexed pension calculated?

Final Salary
Length of Service
Age of Retirement
Length of Service and Age of Retirement determine Retirement Factor
Maximum Retirement Factor of 52.5% is achieved at age 65 and 40 years of contributory service
Formula:
FINAL SALARY x RETIREMENT FACTOR = LIFETIME INDEXED PENSION


How are 54/11 and Age Retirement maximum non-indexed pensions calculated?


Both are similar
Key difference is there is no cap on non-indexed pension under 54/11
Cap on non-indexed pension for Age Retirement is based on a percentage of final salary with excess payable as lump sum
The age factor to determine the non-indexed pension is the same - see our website for examples of age factors


Formulas for maximum non-indexed CSS pension


54/11 formula:
(MEMBER + PRODUCTIVITY COMPONENTS) x PENSION FACTOR

Age Retirement formula:
(MEMBER + PRODUCTIVITY COMPONENTS) x PENSION FACTOR
Capped at a % of Final Salary based on age of retirement
Excess is paid as a lump sum and subject to superannuation preservation rules


Five common considerations when assessing whether to take a 54/11 option

1. An increase in Final Salary
2. Tax – there is different taxation treatment of CSS pensions prior to age 60
3. Job security and likelihood of future employment
4. Are you ready to retire?
5. Investment returns of the CSS Default Fund – should you switch to the Cash Option?


Why Killara Wealth for your CSS financial planning?


Genuine Fee for Service - quoted upfront
Reliable experience and expertise - over 22 years experience advising CSS members
Privately owned and operated – not owned or affiliated with a superannuation fund, bank, life company or any other financial product provider.


Free 15 minute initial phone consultations are available, visit www.killarawealth.com.au to book.



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General Advice Warning & Disclaimer - Any advice in this video is general advice only and does not take into account your individual circumstances, needs or objectives. Before acting on any advice provided in this video you should consider the appropriateness of the advice regarding your individual circumstances, needs and objectives.

The CSS is a defined benefit scheme, is complex and has different rules to standard accumulation superannuation funds. It is recommended that members seek their own financial advice from a licensed adviser regarding their own specific circumstances.