Transition to Retirement

In the past...

In the past, if you were under age 65, your super was locked away until you permanently retired. If you wanted to reduce your hours and hence reduce your income, it meant you had to find a way to live on less income.

Things have changed

The good news is, things have changed.

With the introduction of transition to retirement (TTR), pensions, you can now transfer your super to an income stream, providing additional funds to live on.

Alternatively, you don't even have to stop work or reduce your hours. Even if you continue to work full time, you can benefit from transition to retirement.

Reduce your tax without reducing your income

By using both transition to retirement and salary sacrifice strategies, you could significantly reduce your tax without reducing your income.

There are two reasons why this could be beneficial for you:

maintaining your lifestyle with less work, and
tax savings

The benefits available depend upon your personal circumstances, your income, super balance and type of super fund.

An example

Let's examine 'Jack' who is 60 years of age and still working full time.

'Jack' currently earns $60 000 PA and has $300000 in a taxed superannuation fund.

By restructuring his superannuation fund, Jack could potentially save up to $7000 in tax per year - all without reducing his income or lifestyle.

The actual savings benefit will vary for each person. How big does the tax saving have to be to be worthwhile?

$1000, $2000, $4000?

Why not see how much you might save?

Who should consider a transition to retirement strategy?

Ask yourself these questions:

are you aged 55 or over?
are you working full time or part time?
is your taxable income more than $35000?
do you want to reduce your working hours but maintain your lifestyle?
are you interested in saving tax and improving your retirement savings?

Make sure your superannuation funds are effectively managed.

Many clients are confused about superannuationn and it's benefits for their long term future. Make sure your superannuation funds are effectively managed.

Ask a question about transition to retirement
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Notice the difference a not-for-profit finacial service provider can make for you.

Speak with Timothy Foster from APS Financial Planning on 1300 131 809.