Do you want to ease into retirement by reducing your work hours? Or, give your super a boost before you leave the workforce? You may be able to through a transition-to-retirement (TTR) strategy.
How TTR works
Transition to retirement is a government initiative that lets you access your super while you’re working as long as you’ve reached your preservation age and are under 65. It could help you:
- Reduce your work hours and supplement your income from your super through a regular income stream from a pension account, or
- Maintain your work hours, access a pension income and salary sacrifice more into your super. (You may even be able to structure the strategy so you don’t affect your net income).
TTR for DBD members
If you’re a DBD member, different rules apply:
- You need to have genuinely reduced your work hours by at least 20% and have met other eligibility requirements.
- Using any part of your defined benefit component to start a TTR strategy means you’ll stop being a DBD member and will become an Accumulation 2 member.
- Starting a TTR strategy may impact your existing insurance cover.
The rules around TTR for DBD members are complex. Make sure you read our fact sheet and think about getting advice from a qualified financial adviser.
Tax and TTR
- You don’t pay tax on investment earnings on your pension.
- If you’re over 60, your pension payments are tax free.
- If you’re between 55 and 60, the taxable component of your pension will be included in your assessable income and taxed at your marginal tax rate. A 15% tax offset is available to reduce the amount of tax you pay on the taxable component of your pension.
Before deciding whether a TTR strategy is right for you, read Your guide to pensions and think about getting financial advice from a qualified financial adviser.
Talk to UniSuper Advice on 1300 331 685 to find out how they can help you.
UniSuper Helpline 1800 331 685
UniSuper Advice 1300 331 685