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A strategy to consider
You may hear this described as a ‘Transition To Retirement’ (TTR) strategy.
A TTR strategy is available once you reach preservation age – determined by your date of birth, and between the ages of 55 and 60.
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Two ways to approach TTR
There are two ways you might be able to benefit from a TTR pension:
- Keep working fulltime while your employer continues contributing to your super. You can boost your super with a salary sacrifice (before tax), or make personal contributions and claim a tax deduction. You can then supplement your employment income from a TTR pension drawn from your super (if your balance is large enough).
- Cut down your working hours and draw on your super through a TTR pension to supplement your reduced income. This will help you ease into retirement, but will reduce your retirement savings.
How can I benefit?
The money you receive from your TTR pension may be taxed at a lower tax rate than the salary which is being replaced. For example, TTR pension payments are generally tax-free once you’ve reached age 60. However, any tax benefits will depend on your individual circumstances.
Where can I find out more?
Moneysmart
If you’d like to find out more, a good place to start is at the government’s Moneysmart website.
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Avanteos Investments Limited ABN 20 096 259 979, AFSL 245531 (AIL) is the trustee of the Colonial First State FirstChoice Superannuation Trust ABN 26 458 298 557 and issuer of FirstChoice range of super and pension products. Colonial First State Investments Limited ABN 98 002 348 352, AFSL 232468 (CFSIL) is the responsible entity and issuer of products made available under FirstChoice Investments and FirstChoice Wholesale Investments.
Information on this webpage is provided by AIL and CFSIL. It may include general advice but does not consider your individual objectives, financial situation, needs or tax circumstances. You can find the target market determinations (TMD) for our financial products at https://www.cfs.com.au/tmd which include a description of who a financial product might suit. You should read the relevant Product Disclosure Statement (PDS) and Financial Services Guide (FSG) carefully, assess whether the information is appropriate for you, and consider talking to a financial adviser before making an investment decision. You can get the PDS and FSG at www.cfs.com.au or by calling us on 13 13 36.