What is a transition to retirement (TTR) pension

TTR strategies make use of a transition to retirement (TTR) income stream, which can be started as soon as a person reaches preservation age, without having to satisfy a full condition of release like retirement. A TTR income stream is subject to the same regulations as an account-based pension however the following limitations apply:

  • In general, lump sum withdrawals are not allowed.
  • Each fiscal year, there is a 10% restriction on income stream payments.

The most popular TTR strategy is the usage of concessional contributions along with it.

The advantages of employing a TTR approach can include:

  • Maximizing a superannuation balance tax-effectively in the years leading up to retirement (TTR and concessional contributions strategy).
  • Improved superannuation benefits by balancing the superannuation accounts of a couple’s members.
  • Reducing debt, including mortgages.
  • Cutting back on work hours before retiring and making up the difference in income with tax-efficient or tax-free income stream payments.

Need advice? Contact Macarthur Wealth Management for expert financial advice in Parramatta and Sydney wide on (02) 9683 2869. www.macarthurwealth.com.au

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