Creating pre-retirement options
Transition to Retirement is a financial strategy designed to access portions of your superannuation funds prior to retirement.
Recent legislation changes have reduced the effectiveness of Transition to Retirement Strategies, however, when correctly setup, it can provide advantages prior to reaching 65 years of age.
- Firstly, you can ease into retirement by reducing your work hours whilst maintaining income levels via super pension payments.
- Secondly, you can help to minimise taxation, increase contributions into super to build this faster, whilst maintaining your current income.
Important: analysis of your individual situation is essential for this strategy to be effective as this transition to retirement strategy is not suitable in all circumstances. In addition, many super funds will not permit this strategy.
At Oracle Advisory Group we specialise in analysing your situation and advising the best outcomes for you based on your specific needs.
Frequently Asked Questions
Your preservation age depends on your date of birth. See the preservation age table below for more information.
|Date of Birth||Preservation age|
|Before June 1960||55|
|July 1 1960 – June 30 1961||56|
|July 1 1961 – June 30 1962||57|
|July 1 1962- June 30 1963||58|
|July 1 1963 – June 30 1964||59|
|After June 30 1964||60|
This is based on minimum and maximum pension payments legislated by the government and changes over time based on your age. The maximum prior to age 90 is 10% of fund balance per annum. See below table:
|Age of pension account-holder||Percentage factors|
|65 to 74||5%|
|75 to 79||6%|
|80 to 84||7%|
|85 to 89||9%|
|90 to 94||11%|
|Aged 95 or older||14%|
Not all super funds offer transition-to-retirement pensions, and the legislative requirements are changed often. Best to ask your current super fund whether they offer this super option.
Generally, no, you cannot withdraw a lump sum unless you satisfy a condition of release such as reaching age 65 or retiring.
TRIS payments are subject to tax if you are under age 60. These payments will be taxed at your marginal tax rate (less a 15% offset).
Once you turn 60, your TRIS payments will not be subject to any tax.