Transition to Retirement

Retirement has traditionally been a big leap for Australians. But the ‘one minute you’re working, the next you’re lying in the sun’ scenario is becoming less common.

Nowadays, there is a wide range of choices for people who are considering what to do in their later years. Some people in today’s workforce may prefer to retire gradually, slowly reducing their work hours over time. Others may have no intention of retiring any time soon. And some, upon finally retiring, may decide that they want to return to the workforce.

A simple Transition To Retirement (TTR)

TTR pensions are designed to help older Australians make a simpler transition to retirement by allowing them to access their preserved superannuation benefits via pension payments without having to retire.

The option to gradually reduce one’s work hours while maintaining your take-home income is left up to the individual.

Alternatively, you may wish to keep working the same hours which could then allow you to boost your retirement savings with increased super contributions, thus ensuring a better lifestyle when you do retire.

The Transition To Retirement (TTR) advantage

A TTR pension structure can allow you to salary sacrifice a significant proportion of your income into super and to supplement this amount with a regular income stream from a newly created TTR pension.

An advantage emerges because of the lower rates of taxation generally applied to super, compared with the marginal tax rates on income. This advantage is further increased because any investment earnings within an account-based pension (i.e. when your super fund pays you a pension) will be tax free.

• See how a Transition to Retirement Super Pension helped David gradually make the transition to retirement without affecting his take home income.
• See how Sarah was able to boost her super and make some savings on her tax in the lead up to her retirement.