Transition to Retirement
Exit your SMSF without the hassles.
Exit your SMSF without the hassles.
Ready to slow down but not quite ready to retire? Transition to retirement lets you, if you have reached your preservation age, reduce your working hours without reducing your income. You can do this by topping up your part-time income with a regular ‘income stream’ from your super savings.
You must have reached your preservation age (57 – 60, depending on when you were born) and still working.
Also, you must be a member of accumulation not defined benefit fund.
TTR lets you draw between 2% (4%) – 10% of your fund balance each year.
Once you’re over 65 there are different minimum pension payments rates.
Note however that transition to retirement pension affects your future savings.
If we look after your SMSF, contact our office to discuss your financial requirements and prepare the relevant documentation.
You must have reached preservation age (55- 60) and be still working. Your super also cannot be in a defined benefit fund.
You can only draw between 2% (4%) – 10% while in TTR. AT least one payment must be made each year.
If you are over 60, your pension is tax free.
If you are under 60, then taxable portion of the pension is taxed at your marginal tax rates, but you get a credit for the tax paid by the fund (15%).
You start a TTR pension by transferring some of your super from your accumulation account into a pension account. You should leave at least a small balance in your accumulation account so that it remains open to receive your employer’s compulsory 9.5% super guarantee contributions or any voluntary contributions you may want to make.
We can look after the SMSF paperwork for you.
A TTR pension automatically converts to an account-based pension when you meet a superannuation condition of release, such as retiring or reaching age 65.
Then you will be entitled to tax-free investment earnings and no upper limit to withdrawals.
Alternatively, you can convert TTR back to accumulation phase.
