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Transition to retirement

As our population ages, older Australians are being encouraged to remain in the workforce for a little while longer.

One way to do this more confidently is to find a balance between work and retirement with the aid of a Transition to Retirement (TTR) income stream. A TTR strategy allows people who have reached preservation age (between 55 and 60 depending on when you were born) to access some of your super before you have completely retired.

This can be a way to ease into retirement while helping to reduce your overall tax bill and boost your total super balance.



What does transition to retirement look like?

TTR forms part of a number of financial planning strategies. Two of the more popular are:

  1. To maintain your income while reducing your working hours. 
    A TTR income stream can be used to maintain your cash flow (income) if you choose to reduce the number of hours you work. 
  2. To accelerate your super savings in the run up to retirement. 
    A TTR income stream can boost your cash flow (income), allowing you to salary sacrifice a larger proportion of your salary. If you utilise this strategy after age 60, it becomes even more effective as the income from your TTR income stream will be tax-free.

To take full advantage of a TTR strategy, you’ll need to already have enough in super available to draw down from. There are also limits on concessionally-taxed super contributions, and differences for each individual, depending on your salary level, age, and goals.

What is my preservation age?

Your preservation age is generally the date from which you can access your super benefits, and depends on your date of birth.

Date of birth  Preservation age 
 Before 1 July 1960 55 
 1 July 1960 - 30 June 1961 56
 1 July 1961 - 30 June 1962
57 
 1 July 1962 - 30 June 1963
58
 1 July 1963 - 30 June 1964
59
 After 30 June 1964 60 

How can a TTR income stream help you?

A TTR strategy could help reduce your overall tax bill, or boost your super. But it’s important to know whether it’s right for you.  

To find out how a Transition to Retirement income stream can help you with your retirement savings, call an expert today on 1800 620 305. You can meet with one of our professional financial planners without cost or obligation. The fee you pay will reflect the advice you actually need and the level of service that you want.


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