How to make the most of your super as you retire or semi-retire
The transition from working life to retirement or semi-retirement is different for each individual.
If you decide to keep working, it is important that you know you can access some of your super while you’re still working, once you have reached “preservation age” – the age at which you can access your super.
With a transition to retirement stream (TTRS) strategy, you can begin receiving an income from your super once you reach your preservation age, even if you haven’t permanently retired.
The benefits of TTRS include your income payments being generally tax free, if you’re 60 or over.
Another benefit is being able to continue to grow your super if you’re still working, and using your TTRS payments to top up your take-home pay, so you can work less or save more.
There are, however, some rules if you do want to transition into a retirement stream, which your super business can assist you with.
The rules include:
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You generally can’t make lump sum withdrawals.
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You must receive between 2% and 10% of your TRIS balance each year.
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Drawing from your super now could mean you have a lower balance when you fully retire.
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While you’re under 60 years of age, your TRIS payments will be subject to tax – any taxable component will be taxed at your marginal tax rate less a 15% offset. From 60, you don’t pay any tax on income payments from your super.
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Earnings in your TRIS receive the same concessional tax treatment as your super – earnings are taxed at up to 15%.
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