making a
SMOOTH
TRANSITION
With a Transition to Retirement strategy you can continue
working AND access your super.
Retirement used to represent a sharp break
with the past—one day you were working
full time, the next you were sitting at home
with the rest of your life ahead of you.
These days, the transition doesn’t have to be
quite so abrupt.
Many Australians are keeping themselves
active and engaged by continuing for longer
in the workforce on a part-time or
contractual basis. In fact, more than two in
five Australians who work full time and
intend to retire are looking to reduce their
hours first.[1]
The good news is that in the few years prior
to retirement you can start to draw an
income from your retirement nest egg while
you continue working and contributing
towards your super.
Access your super the smart tax way
If you’ve reached your super ‘preservation
age’ (currently 55 but rising to 60), you
can take some of your existing super as an
income stream to help make your transition
to retirement a smooth one.
This is called a transition to retirement (TtR)
strategy. And it can be very tax effective.
You can continue to work and contribute
towards your super using tax-effective
salary sacrifice contributions.
You can top up your income with a
tax-effective income stream from your
retirement account (between 4% and up
to 10% of the account balance can be
drawn each year).
And there’s even a way to ‘refresh’ your
TtR strategy every year for potentially
even more tax benefits
There are two main ways you can use a TtR
strategy.
1. Less work, potentially the same after-tax
income
The first option is a TtR strategy that may
allow you to cut down your working hours
while maintaining the same level of after-tax
income.
Let’s say you’re over 55, you earn $75,000
a year before tax and you have $250,000
in your super.
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