Choosing to start a retirement income stream can be a big decision. When you apply for a HESTA Retirement Income Stream account, there are a few choices to make and steps to go through. These help to set up your account with things like your investment options, payment amount and frequency, and beneficiaries.
This guide explains what you’ll be asked and what these questions could mean for you.
A few of the steps have more to them, but you can use the Save button during your application and come back to it. It’s worth keeping in mind that some of your decisions aren’t locked in forever. You can change things like your payment amount and frequency, and your investment options later.
And remember, if you need a hand, our team is here to help — just get in touch.
It helps to have a few things handy to help you complete your application:
This is where you can let us know a bit about what stage you’re at. This helps us confirm whether you’re eligible to access your super and start a HESTA Retirement Income Stream account.
You can generally access your super when you’ve met a condition of release. A condition of release includes:
If you’ve told us you’ve retired or ceased an employment arrangement, you’ll need to tell us the date you stopped working.
Setting up a HESTA Retirement Income Stream means opening a new account with HESTA, separate from your HESTA Super account. Here’s where you can let us know how much money you want to move into this new account.
The amount you transfer will be the starting balance of your new Income Stream account. You’ll be asked how much to transfer from your HESTA Super account. You can choose:
Keeping your HESTA Super account open might be a good option if you plan to keep working (or you decide to pick up some part-time work) and your employer needs to pay your Super Guarantee (SG) contributions.
The amount you transfer is the money your new account starts with, and it stays invested.
This isn’t the amount you’ll receive. In step 3, you can choose how much of it you’d like to be paid as income, and how often.
Here’s the part where you can choose how much you’re paid and when. There are a few things to decide on in this section. Let’s go through them.
You’ll be asked how often you’d like to be paid:
If you’re starting an income stream after 1 July, your first year’s payment will be pro-rated. This means it will be smaller and only covers the time remaining until 30 June.
If you don’t make a choice on payment frequency, you’ll receive your payment yearly on 28th June. You can always change your payment frequency later through your online account.
If you choose any option other than fortnightly, you can choose to be paid on either the 15th or 28th of the month. Fortnightly payments are made on Tuesdays and follow a set schedule.
You’ll also be asked if you want to defer your first payment. If you apply for a HESTA Retirement Income Stream account in June, you can choose to start your payments in the next financial year. If you answer yes, you’ll choose the month you’d like your payments to start.
There’s a minimum amount you need to withdraw from your income stream each year. It’s a percentage of your account balance set by the government. These are called drawdown limits, and they depend on your age. For example, if you’re 65, your minimum drawdown is 5%.
You can choose to be paid:
Pension indexation is a percentage you can choose your payments to go up by over time, as long as you haven’t nominated the minimum payment amount. This increase happens once per year. It’s designed to help your payments keep up with the rise in the cost of living. You can’t index payments if you’ve nominated the minimum payment amount.
You can choose:
You’re not locked into the payment amount and frequency you choose when you set up your HESTA Retirement Income Stream account. You can easily change when and how much you’d like to be paid any time through your online account, within government set limits.
Let us know where you want your income stream payments to go. You’ll need your bank name, account name, BSB and account number. The account needs to be in your name.
This is an important step. Nominating a beneficiary is how you let us know who you’d like to receive your income stream if you die.
If you don’t nominate a beneficiary HESTA will decide who receives your death benefit.
There are specific rules on who you can nominate as a beneficiary. It’s worth reading up on beneficiary nominations if you’re not sure.
Depending on your choice in this step, you’ll need to provide the details of your beneficiary or beneficiaries.
Reversionary beneficiary
A reversionary beneficiary receives your income stream after you die, as long as they still meet the eligibility rules at that time. You can only nominate one reversionary beneficiary, and they must be either:
In most cases, you can’t change or remove a reversionary beneficiary. If you want to change your reversionary beneficiary, you’ll need to set up a new HESTA Retirement Income Stream account by completing a new application. A reversionary beneficiary nomination takes priority over any binding nomination you make later. It’s a good idea to get advice before you nominate.
Non-lapsing binding beneficiary or Legal Person Representative (LPR)
When you make a valid non-lapsing binding nomination, we must pay your benefit as you’ve nominated.
You can nominate:
This nomination stays in place until you change or cancel it. In some circumstances, for example if your nominated beneficiary dies before you, your nomination will no longer be binding.
If you nominate more than one person, the percentages you give need to add up to 100%, otherwise your nomination won’t be valid.
We ask a couple of questions to help make sure HESTA products are right for our members. Your answers won’t impact any changes you make to your investments.
First, we’ll ask whether your investment choice is guided by financial advice.
If you’re making your own choice, we’ll also ask which investment setting you’d be more comfortable with. This ranges from higher volatility with mostly growth assets, to very little volatility with mostly defensive assets. You can select more than one.
Here’s where you can choose how your money is invested.
You can either:
If you decide to create your own investment strategy, this is where you choose the investment options and percentage of your money that is invested in each option.
You’ll also need to decide in the next step how your payments are drawn from each investment option.
If you’ve chosen your own investment options, this is where you can decide what proportion of your income stream payments come from each investment option.
You have 3 options to choose from:
We ask if you’re planning to claim a tax deduction for personal contributions you’ve made to super.
If you answer yes, you’ll need to let us know you intend to claim before you start your income stream application. The fastest way to do this is through your online account. You can also complete the ATO’s Notice of intent to claim or vary a deduction for personal super contributions (form NAT 71121), available at ato.gov.au/forms.
We can’t action your notice of intent after you’ve submitted your HESTA Retirement Income Stream application. We need to acknowledge your notice before your balance is transferred.
If you don’t plan to claim a deduction, or have already claimed a deduction, answer no and carry on to the next step.
We’re required by law to verify your identity. To do this, we need to match your details online against some external sources.
During this step, you’ll need to provide 2 types of ID from the following:
You’ll need to tick a box to consent to us checking the details you’ve provided with the document issuer. A secure third-party service carries out this check.
If we can’t verify your details online, you’ll need to send us certified copies of your ID so we can process your application.