Retirement Planning

What You Need to Know About Transition To Retirement Strategy

14 July 2022

As you near your retirement period, your mind may already be filled with what you should do once the day comes. And it can make you feel pressured. The good news? 

You don’t have to retire in one go; you can ease into it gradually through a Transition To Retirement (TTR) strategy. 

How?

  • Open a TTR Account

A TTR Income account is an account-based pension that can provide you with the flexibility to receive payments from your super.

Your TTR Income account and super account will work together while you’re still working, to help you transition to retirement, by topping up your salary using income payments from your super.

If you have reached your preservation age, you can use part of your money from your super to open your TTR Income account.

Your income payments are then transferred directly to your bank account, and since you’re still working, employer contributions mean your super account balance may continue to grow. 

  • Slow Down Your Work Life

While you are still working and earning, you can begin to downsize your workload so you will have time and energy to ease into your retirement.

Here, you can go on part-time work where you reduce your working hours while making the same amount of pay. This will give you a feeling that you are slowing down at work and making way for retirement.

  • Speed Up Your Super Savings

A TTR strategy involves your superannuation fund. When you are about to retire, your super will hold most of your savings for retirement. 

This is the time when you need to maximise your savings so that you have enough to fund your retirement needs. 

The best way to boost your savings is to contribute more to your super fund, so you can earn more interest on your money over time. 

If you’d like to learn more about super contributions, check out our article on Voluntary Super Contributions: Helping You Secure Your Dream Retirement

 

The TTR Pension

If you’re employed, you could choose to work fewer hours or maintain the same number of hours while making salary sacrifices or personal contributions to your superannuation. In both cases, you could use the income from your TTR pension to top up any reduction in your take-home pay.

If you’re self-employed, you may not be able to set up a salary sacrifice arrangement. This is where you would get your employer to make additional contributions to your super fund from your before-tax income.

You can make personal contributions to your superannuation as a self-employed person, which may be tax-deductible.

If you are an employee of your own company, you could arrange to salary sacrifice part of your pay into superannuation.

 

What Else to Consider?

Weigh your options and make your own decisions as to how you want to proceed in your superannuation investment. Your financial advisor can help you plan for your retirement.

Your financial needs may change over time, and your superannuation fund may become insufficient to provide for your future needs. Consider your retirement options and have the income available when you need it.

You may choose to convert your superannuation pension to a lump sum to provide you with more flexibility, which can be invested to provide income now and in the future.

The value of investments and their income will fluctuate, and so will your superannuation fund. This could mean you won’t have enough money to support your ideal lifestyle. You might want to consider your options, including the possibility of starting to live off part of your superannuation fund before you retire.

 

The Countdown To Your Retirement Begins Now!

 

Work with Cambio Group’s Retirement Planners 

Following a Transition To Retirement strategy can help prepare you for your retirement. You can also make the most of your working hours and your money by saving more and planning your retirement.

Seek financial planning for retirement here with us at Cambio Group. Our Gold Coast financial advisors will help you achieve your goals. 

Get in touch with us today!

 

Disclaimer: The information (including taxation) in this website does not consider your personal circumstances and is of a general nature only – unless otherwise stated. You should not act on the information provided without first obtaining professional advice specific to your circumstances.

[gravityform id="2" title="false" description="false" ajax="true"]

A full compliment financial services group with 1 simple mission: to deliver positive change in the lives of our clients

For over 20 years we’ve been helping people like you make smart, informed business and financial decisions. We’re in this to make a difference, to help you avoid the common mistakes that prevent people from building a business and creating a life they truly love.

Restore direction in your life with a tailored financial plan from Cambio Group.

Book a Complimentary Consultation