Transition to retirement

transition to retirement

Thinking about retirement but not ready to stop working yet? A transition to retirement strategy could be for you. (We call it TTR for short.)

How it works

If you’re approaching retirement, TTR can offer you the best of both worlds.
It lets you contribute to your super while drawing on it at the same time.
Or, it can allow you to reduce your working hours without reducing your income.

TTR allows people who are nearing retirement to continue working and contributing to their super, while also drawing on their retirement savings.

The rules allow you to make up to $27,500 of concessional contributions* into your super, while drawing between 4%^{^} and 10% of your retirement savings to supplement any loss in take-home pay. This can offer significant tax savings, particularly if you’re over the age of 60.

Enter your date of birth to find out when you will reach your preservation age:

Date of birth	Preservation age
After July 1964	60
1 July 1963 - 30 June 1964	59
Before 30 June 1963	Reached

TTR strategies can be used to:

Ease into retirement
You might be able to reduce your working hours without reducing your income, drawing on your retirement savings while working part-time. The downside of this strategy is that you’ll be accessing your retirement savings earlier than usual.
Boost your super without changing your lifestyle
If you’re looking to maximise your super, you can continue to work full-time while making salary sacrifice contributions. You can then use TTR pension payments to top up your reduced salary. Your salary sacrificed contributions will be taxed at 15% rather than at your marginal rate**. In most cases, this TTR strategy is taxed more favourably than your salary^#.

* This includes employer contributions and optional before-tax contributions and extra tax applies if you exceed this cap.
^{^}The minimum drawdown of 4% has been halved to 2% until 1 July 2022 to help during the Covid crisis.
** People earning over $250,000 per annum including concessional contributions are subject to 30% tax.
^#Up until age 60, your TTR income payments are taxed at your marginal rate with a 15% tax offset. TTR income is tax-free after age 60.

We recommend you discuss your individual needs with a financial planner before commencing any TTR strategy.

Read the Target Market Determination for this product.