How does a TTR strategy work?

A Transition to Retirement (TTR) strategy, is a way to reduce your work hours without reducing your take-home pay. You can ease into retirement by working fewer hours, but you draw on your super through a Pre-retirement Super Pension to make up the difference.

What happens to TTR when you turn 65?

A TTR pension automatically converts to an account-based pension when you meet a superannuation condition of release, such as retiring or reaching age 65. When your TTR pension becomes an account-based pension, you’ll be entitled to tax-free investment earnings and no upper limit to withdrawals.

Is transition to retirement worthwhile?

Transition to retirement may still be a worthwhile option, depending on your personal circumstances and whether you are looking to reduce your working hours, save tax or boost your super. The numbers can be complex so talk it over with your super fund or financial adviser.

Is TTR taxable?

The taxable component of TTR pension payments attract a 15% tax offset between preservation age and 59 and all payments are tax-free1 at age 60 or over. Investment earnings are generally taxed at a maximum rate of 15%.

What age can you start TTR?

If you’re aged 55 to 60 and still working, you can use a TTR strategy to: supplement your income if you reduce your work hours, or. boost your super and save on tax while you keep working full time.

At what age can you withdraw super?

65
You can withdraw your super: when you turn 65 (even if you haven’t retired) when you reach preservation age and retire, or. under the transition to retirement rules, while continuing to work.

Do I pay tax on my super after 65?

There is no maximum pension amount if you are aged over 65 and you are free to access all your Super Benefit as desired. No tax is payable on Pension withdrawals made after 65.

What age can I access my superannuation tax free?

60 or over
If you are aged 60 or over and decide to take a lump sum, for most people all your lump sum benefits are tax free. If you are aged 60 or over and decide to take a super pension, all your pension payments are tax free unless you are a member of a small number of defined benefit super funds.

What age can I start transition to retirement?

55 if you were born before 1 July, 1960. 56 if you were born between 1 July, 1960 and 30 June, 1961. 57 if you were born between 1 July, 1961 and 30 June, 1962. 58 if you were born between 1 July, 1962 and 30 June, 1963.

At what age can you start a TTR?

Will I pay tax on my pension when I retire?

Income Tax and National Insurance contributions After you’ve retired, you still have to pay Income Tax on any income over your Personal Allowance (find out more below). This applies to all your pension income, including the State Pension.

What should I do if I start a TTR pension?

Check if your cover reduces or stops if you start a TTR pension. If you want to reduce your work hours, a TTR strategy can top up your income. Continue to receive super contributions — This helps to replace the money you take out. Pay less tax — If you are 60 or older, your TTR pension payments are tax free.

When to use transition to retirement ( TTR ) strategy?

A ‘transition to retirement’ (TTR) strategy lets you access some of your super and keep working. Setting this up can be complicated, so contact your super fund or financial adviser for advice. If you’re aged 55 to 60 and still working, you can use a TTR strategy to:

How much income can you get from a TTR?

A TTR income stream allows you to access up to a maximum of 10% of your super as regular pension payments each financial year. And, if you want to keep working, you can also continue receiving an income.

Is the tax savings of TTR still worthwhile?

The TTR pension payments are likely to be more concessionally taxed than the salary they replace. With the first of these benefits being removed under the new super rules, the tax savings of a TTR strategy is reduced. What is changing?

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