Transition to Retirement (TTR) Pension
A Transition to Retirement Pension (TTR pension) enables you to access your super while you're still working.
It's a great way for people who have reached their preservation age to gain access to their super benefits without having to retire or leave their workplace.
Essentially, a TTR pension works in the same way as any other pension. Part or all of your super is moved into a TTR account. You can then access it as an income stream.
The only difference is that a TTR pension cannot be cashed out as a lump sum until you're fully retired, or reach a standard condition of release.
Learn more about conditions of release
Understanding the benefits
There are a number of perks that come with starting a TTR pension. If you've reached your preservation age and you're still working, there are three main strategies to consider.
Increase your income
You can continue to work your normal hours if you have a TTR pension. This means you can increase your income by receiving regular payments from your TTR that you can use to pay off debts before you retire or give your lifestyle a well-deserved lift.
Cut your hours, not your income
If you're looking at easing into retirement by reducing your work hours, a TTR can provide an extra source of income, meaning you can work less but still maintain your income. You won't grow your super balance as quickly, but you'll have more free time to spend however you choose.
Boost your super and pay less tax
Combining a TTR pension with salary sacrifice can be a smart way to save money on income tax and boost your super balance.
If you're aged 60 or older, your TTR income payments are tax free.
If you're under 60, your TTR income payments are taxed at your marginal tax rate but you receive a 15% tax offset.
Investment earnings for TTR accounts are taxed at 15%, until you turn 65 or notify us that you meet one of the following conditions of release:
- permanent incapacity
- terminal illness
- death and your benefit is paid to a reversionary beneficiary.
You can start a TTR pension today by transferring some of your super to an account-based pension.
Keep in mind that you must have at least $10,000 of super money to invest, and will need to keep your super account to continue to receive your employer's contributions or make your own.
Taking the time to calculate your salary sacrifice amounts and pension payments can provide serious super benefits without significantly reducing your take-home pay.
The benefits you can achieve will depend on your salary, the income you need to meet your lifestyle needs, the amount in your super account, and your age. It's always a good idea to seek professional advice to understand if a TTR pension is for you.