Transition To Retirement
What is a transition to retirement (TTR) strategy?
A transition to retirement income swap strategy is for those who have reached their superannuation preservation age but are still working. Rather than receiving all their income as post-tax income, they have the following options:
- Have their employer make a pre-tax superannuation contribution on their behalf which is a form of “salary sacrificing”.
- If eligible, they make a tax deductible personal superannuation contribution.
- Other superannuation contribution types may also be appropriate depending on your circumstances
They then effectively replace or “swap” this income with a pension drawn from a transition to retirement Account-based pension that is started with superannuation monies. This is a tax effective way to increase retirement savings while achieving a level of net income that meets current living expenses.