Transition to Retirement Strategy (TTR)

The transition to retirement (TTR) strategy is a strategy we assist clients who have reached their preservation age and are still currently working.

Age 55 and Still Working?

To be eligible to convert your superannuation, you first must meet your preservation age and for those who are born prior to 30 June 1960, your preservation age is 55. If you are age 55 and still working you now have the opportunity to convert your superannuation from ‘accumulation phase’ into a ‘pension phase’.

Most tax effective entity in Australia

Pensions are the most tax effective structure available in Australia and by converting your superannuation from accumulation to pension phase, you will reduce the tax rate from 15% to 0% which can save you a considerable amount in tax on your superannuation:

How you can Save Tax

As an example, a client has a super balance of $700,000 and currently has assessable income of $50,000 from interest income and dividends. Based on the 15% tax rate on super, the client will pay $7,500 a year in tax within his superannuation.

By implementing the Transition to Retirement Strategy, we now take advantage of the 0% tax environment for pensions. As such, in this example above, the client has now reduced the tax payable within superannuation from $7,500 to $0 per year. Over a 10 year period, this equates to $75,000 in tax savings by implementing the Transition to Retirement Strategy.

How we can HELP you

We can assist you with a TTR strategy by implementing the following;

  • Converting your superannuation from an accumulation phase into a pension phase.
  • Take advantage of the 0% tax treatment on earnings and/or any capital gains.
  • Determine a pension draw-down you require on your superannuation if you decide to work part-time
  • Determine the minimum draw-down on your super and salary sacrifice the difference should you decide to work full-time.

Contact Us

If you are currently age 55 and would like to take advantage of the Transition to Retirement Strategy, please complete our online enquiry form or contact the office on 8621 8485.