What is a TTR Strategy?

A TTR Strategy is a strategy of moving all or part of your super to a pension account which allows you to start receiving payments from your super even while you are still in employment . You can transfer part or all of your superannuation funds into a Transition to Retirement Pension and as long as you are above preservation age for Superannuation (between age 55 and 60 depending when you were born) you can commence receiving income from your Superannuation.

If you are still working you should keep a balance in the accumulation stage of super, for your employer contributions to be paid to super.

What are the benefits of a TTR Strategy?

If you are still working and you want to reduce your hours at work, you can start receiving income from your Superannuation to top up your employment income. This may mean that you can work less hours without compromising your income.

Another potential benefit is making salary sacrifice contributions to super, because these contributions are only taxed at 15% by your super fund.

If your income is above $37,000 you could receive tax benefits because the salary sacrifice contributions to super are taxed at 15% instead of your marginal tax rate which could be as high as 45% plus 2% Medicare levy (depending on your income).

How a TTR pension works

If you are over preservation age and under 65 and still working, you can transfer part of your super balance to a TTR Pension.

There are minimum amounts which must be withdrawn and currently if you are under 65 then 2% of your balance in the TTR Pension must be paid per annum. The maximum amount which can be paid is 10% of your TTR Pension balance per annum.

  • Stephen Baird