A transition to retirement strategy is a superannuation account-based income stream that can be started when a person reaches their preservation age.

Too many BIG words!

Basically, a transition to retirement strategy allows individuals to access up to 10% of their superannuation balance each year as income, even if they are working, once they reach a certain age (called 'preservation age'). 

Preservation Age

Date of birthPreservation age
Before 1 July 196055
1 July 1960 - 30 June 196156
1 July 1961 - 30 June 196257
1 July 1962 - 30 June 196358
1 July 1963 - 30 June 196459
From 1 July 196460

Roger, a professional bodybuilder with 0% body fat, has $100,000 in superannuation. He has reached preservation age and can access up to 10% ($10,000) of his superannuation as a transition to retirement strategy.

Note: while the maximum amount Roger can draw from super as a 'TTR' is 10% of his super balance, there are minimum amounts that must be withdrawn, based on his age at the time. For example, if he was under 65, he must withdraw at least 4%.

A popular TTR strategy

A popular 'TTR' strategy is to receive a superannuation income stream, then use salary sacrifice or make personal contributions into superannuation. This allows the person to maintain their income (with the TTR pension) and, potentially, lower their tax.

Watch our Salary Sacrifice video if you are as confused as we were!

Note: Not all superannuation funds offer a transition to retirement strategy. 

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A transition to retirement strategy is…

A transition to retirement strategy is a superannuation account-based income stream that can be started when a person reaches their preservation age.