Planning and preparation ensures a comfortable retirement. That is why strategic advice on how to optimize your after-tax income and pre-tax income can help you get ahead.

Once you have reached preservation age, you can access a portion of your super while you’re still working. This is via a TTR strategy.

You can start a TTR strategy by opening a TTR Income account-based pension alongside your regular super account. This gives you the ability to save more coming into retirement, alternatively you could wind back on work whilst adding to your take-home pay

This is effective by keeping some money in your super account to continue to receive your employer’s contributions. Whilst having a lump-sum drawn down each financial year of (4-10%) or an income stream.

Pros

Pay less tax — If you are 60 or older, your TTR pension payments are tax free. If you are 55 to 59, your pension is taxed at your marginal tax rate, but you get a 15% tax offset.

Ease into retirement – start planning what you want to do with your leisure time before you have retired completely.

Continue receiving super contributions – this will help to replace any money you take out.

Cons

Affects retirement income — If you start drawing down your super early, you’ll have less money when you retire.

Using TTR to save on Tax:

Pros

Save tax — You pay 15% tax on salary sacrificed contributions. Your marginal tax is likely to be lower than this.  

Boost your super — A TTR pension can be used with salary sacrificing to top up your super as you approach retirement.

Cons

Complexity – you might have to pay for financial advice so that you understand which strategy is best suited to you.

If you require help with understanding what’s best for you, the team at Superannuation Advice Australia can help.  Contact us today!

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