Are you considering reducing your working hours or looking for a tax-effective way to build your super? This strategy could be for you.
Are you over the age of 55, thinking about retirement but not ready to stop working yet?
Transition to retirement (TTR) is a strategy that allows people of preservation age (between 55 and 60 depending on your date of birth) to continue working while drawing down some of their super benefits.
So how does it work? The rules allow a worker to salary sacrifice up to $25,000 a year into super, while drawing between 4% and 10% of their super savings to supplement any loss in take-home pay. For workers in a higher tax bracket, this strategy can provide a significant tax saving.
Some TTR strategies to consider include:
We also recommend you discuss your individual needs with a financial planner before commencing any TTR strategy.