Transition to Retirement (TTR)

Financial Spectrum Financial Planning -  Sydney CBD

Did you know that once you've reached your preservation age you can access your superannuation benefits without having to retire or leave your job? 

Benefits of Transition to Retirement (TTR)

> extra income

Being able to access your superannuation funds can significantly increase your cash flow.  This can be boosted even more if you choose to continue working either full or part time.  Your extra income can be used to reinvest or to finance other lifestyle goals where appropriate.

> boost retirement savings

Implementing a Transition to Retirement (TTR) strategy can provide you with tax and investment benefits that, when used effectively, can actually end up boosting your retirement savings in your super fund.

> flexible employment

You've worked hard for the most part of your adult life, so when you get older you naturally want to take life a bit easier and have more time to enjoy with friends and family.  Implementing a Transition to Retirement (TTR) strategy can give you the flexibility to work fewer hours and use the income drawn down from your superannuation fund to supplement your income.

Who is Eligible for TTR?

You are eligible for Transition to Retirement once you have reached your Preservation Age. 
Your Preservation Age* will depend upon your date of birth:

 * correct as at 24 Aug 2009

Things to Consider Before Using TTR

Transition to Retirement (TTR) isn't necessarily the right strategy for everyone.  You should consider the implications of implementing TTR to your lifestyle and finances.  You should seek the help of an experienced financial planner who can assist you in determining whether it's the right strategy for you and can assist you in navigating the road ahead.  Some things you ought to consider before TTR are:

> reducing my work hours - can I?  should I?

Many people choose the Transition to Retirement strategy when they decide to reduce their work hours.  But before you hang up your gloves you should seriously consider the impact of this decision.  Are you really ready for semi-retirement?  Is your employer able to offer you reduced work hours?  What will you do with your new spare time?

> changes to your income

Transition to Retirement (TTR) and reducing your work hours may impact upon your regular income.  You need to check that there won't be a shortfall from the income that you're currently receiving.  If there is, would the income from your superannuation be sufficient to make up this shortfall.  If not, can you afford to keep your current standard of living in the new phase of your life?  Consider that your decision to retire either partially or fully will have long-term implications.

> tax implications

One of the appealing features of using Transition to Retirement is that it may reduce your tax as you may be able to receive part of your income at a lower tax rate (usually 15%) than the marginal tax rate that most people pay. 

Download your free Transition to Retirement Ebook

For more information about Transition to Retirement download our free Transition to Retirement Ebook.

Get professional financial advice on TTR

Remember though that everyone's situation is different so you should get professional advice to see if TTR is right for your unique situation.  For expert advice in Transition to Retirement strategy contact a Financial Spectrum financial adviser to arrange your first free financial planning meeting or give us a call on 02 8238 0888.  It can make a real difference to your financial position and lifestyle. 

Financial Spectrum is a Principal Member
of the Financial Planning Association
of Australia (FPA)