Superannuation has traditionally been structured in a way that meant you needed to reach your preservation age and retire from the workforce in order to access your superannuation benefits.

This meant that those who wanted to reduce their working hours in the years leading up to full retirement may not have been able to do so, as they couldn’t access their super to make up for a reduction in income.

In recent years, legislative changes to the superannuation environment have allowed anyone aged 55 or over to start a non-commutable income stream.  This is not a new product as such, rather it places a restriction on commutability of traditional account based income streams until a subsequent condition of release is met (i.e. retirement or attaining age 65).

Who would a TTR Pension suits?transition-to-retirement

  • People who wish to transition to retirement by reducing their working hours, whilst retaining similar after tax income.
  • People who have reached preservation age and wish to continue to work full time and wish to reduce overall tax liability without sacrificing their net income.

Potential Advantages

  • Reduction in overall yearly tax liability.
  • All pension income from your superannuation fund is tax free if you are over age 60.
  • The earnings and capital gains associated with the pension balance are tax free.
  • Through implementing this strategy your combined liability to tax per annum (personal tax and super contributions tax) is reduced.
  • Increase in superannuation balance at age 65.

Potential Disadvantages

  • You will need to confirm with your employer that there will be no implications to your possible sick leave, holiday and long services leave.
  • Potential implications to any income support received from the government.

How we can help?

  • Structured appropriately, through a combination of salary sacrifice and pension payments, we can calculate the most effective way to reduce tax and provide additional savings for your retirement.

More About -- > 

Thomas Jacks BCom (Acc), SMSF SpecialistTM, Adv. Dip F.S. (FP)
“I want to be able to assist clients with their investment and retirement planning by providing real strategy advice. It’s my aim to not only help my clients but to educate them by addressing the entire picture” Google Plus

Categories: Retirement Planning, Superannuation   |  Posted on
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