Transition to Retirement Strategies

Transition to Retirement Strategies can be implemented when an individual reaches their superannuation preservation age, but continues to work. The strategy involves the commencement of an income stream from superannuation which can either be used to supplement a reduced wage if the individual chooses to reduce their work load, or increase their salary sacrificed contributions. The strategy effectively replaces a wage which is fully taxable, with a pension which is concessionally taxed, or possibly tax free. In addition, the commencement of the pension means that the earnings of the investments supporting the pension become tax free.

Your age and the components of your superannuation balance will determine whether or not a Transition to Retirement strategy proves advantageous. A detailed analysis of these components and the effect on your personal taxation position should be assessed prior to the commencement of such a strategy.