Transition to Retirement
Transition to retirement, or 'TTR', allows you to access your superannuation funds providing you have reached your 'preservation age'.
While many people choose a transition to retirement strategy to ease into retirement and work part time, this is not something you have to do. You can still continue to work full time and still reap the benefits of TTR.
Your super monies can be withdrawn using a pre-retirement pension called a 'non-commutable income stream'.
Benefits of transition to retirement
- Tax effective - money from your income stream attracts less tax compared to your taxable working income.
- Boost your income - contribute more to super without having less money to live on and make your retirement funds last longer.
- Boost your super - take advantage of salary sacrifice contributions which are taxed at a lesser rate.
- Work less hours - ease into retirement by working part time without impacting your income.
Preservation age & TTR
To be eligible for Transition to Retirement you must meet your preservation age. Your preservation age is generally the age you are allowed to access your super benefits.
|
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 |
Source: ATO 2011
Income streams for transition to retirement
To access your superannuation monies with TTR you will need a non commutable income stream.
A non-commutable income stream is a regular pension that does not allow lump sum cash withdrawals.
Many superannuation funds will offer their own non-commutable income streams, however in the event that your fund does not have one we can help you move to a super fund which does offer this.
Things to be aware of before deciding
When considering a transition to retirement strategy your superannuation fund, income stream, and salary sacrifice arrangements must be made in the correct way.
Not taking the correct steps and precautions may adversely affect what should be a happy and stress free retirement.
To discuss the transition to retirement superannuation strategy, and how it can be applied to your needs and situation, call an xLife adviser on 1300 135 205 today.
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September 2011
