Transition to Retirement (TTR) Strategy Explained
A TTR strategy allows working individuals who’ve reached their superannuation preservation age to swap post-tax income with a pension from a TTR account-based pension, funded by superannuation monies. This swap can be achieved through salary sacrificing or tax-deductible personal contributions. It’s a tax-effective method to enhance retirement savings while maintaining current living standards. However, it’s not universally applicable and requires personalized financial advice. The strategy is most beneficial for those with existing superannuation savings and offers more tax advantages after the age of 60.
Key Considerations and Changes in TTR
When considering a TTR, it’s essential to evaluate personal risk tolerance, current income needs, tax optimization of superannuation, and the potential tax impacts of the strategy. Investment choices and protection of assets and income are also crucial. Recent changes have complicated the TTR strategy, necessitating alternative contributions and strategies to maximize benefits. A well-crafted investment strategy is vital, as it determines the performance and security of investments. With Centrelink’s evolving policies on pensions and assets tests, early and strategic planning for Age Pension benefits is critical to avoid reductions in pension over time.
Plan a smoother shift to your golden years
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