A Transition to Retirement (TTR) Pension is an option that allows you to access a portion of your super as in income stream once you’ve reached your preservation age, even if you have not yet permanently retired from the workforce.
What Are The Benefits?
- If you decide to work fewer hours as you approach retirement, you can use a TTR Pension to supplement your work income.
- You may be able to reduce tax paid on your normal taxable income without decreasing the amount available to cover your expenses by combining a TTR Pension with making additional deductable contributions back into your super account. You should obtain financial advice if this is something you’d like to explore.
How Do They Work?
- You need a minimum of $20,000 to start a TTR Pension. You can set up an account by transferring money from your superannuation accounts (including your Christian Super account) and you may also be able to transfer amounts from your personal savings (subject to certain conditions – please refer to our Pension Guide for further details).
- A TTR pension can only be taken as a regular income stream, however you can nominate the frequency of these payments. You can choose to receive this type of pension twice a month, monthly, quarterly, half yearly or yearly.
- The total TTR Pension amount you can receive in any financial year is limited to a maximum of 10% of your account balance at 1 July each year.
Important Things to Consider
- You will need to keep a separate superannuation account open (e.g. your Christian Super account) with a minimum balance of $6,000, in order to accept any contributions or rollovers, as you cannot add additional funds to a TTR Pension account after it has commenced.
- There is no insurance connected to a TTR Pension account. You will need to keep a separate superannuation account open (e.g. your Christian Super account) in order to maintain any Death, Total and Permanent Disablement (TPD), or Income Protection insurance. Note that all insurance cover connected with your super account will cease when you turn 70, regardless of your employment status. You can find further details in our Insurance Guide.
- Before age 60, any taxable component of your TTR Pension payments will be included in your taxable income and will be taxed at your marginal tax rate, less 15%.
Where to Find Further Information
- Our Pension Guide contains further details about TTR Pensions, including information about investment returns and fees for each investment option.
- If you are considering a TTR Pension, please contact us to discuss the type of financial advice that you may need.
If you have any questions please contact our Member Care Team – we’re here to help.