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Book a FREE consultation
and receive your complimentary eBook

Get started with a free strategy consultation and receive a copy of the Good Fortune Guide – written by James McFall, Managing Director Yield™ FP and 2020 National Finalist Certified Financial Planner of the Year to help educate you on your Financial Plan.

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Transition to Retirement with confidence

Deciding to Transition To Retirement (TTR) is a lot more than simply choosing to stop work. It is a transition from a long period of your life spent in the workforce that has likely given you more than just money. For many of us, it forms part of our identity and gives purpose and socialisation and therefore when the time comes to retire it can seem daunting. TTR has obvious financial implications too, as when you become fully retired, you rely entirely on your assets to supplement your income needs and for both reasons many of our clients decide to ease into retirement, by transitioning to part-time work first 

 

If you are age 60 or over (and in some cases it is possible for those over 55), you can supplement your part-time income with your Transition to Retirement income account, so you still have the same take home pay. A TTR strategy also lets you increase your savings for retirement by putting more into super and saving more on tax, whilst also not decreasing the total pay you take home. 

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How it works

There are some important considerations and eligibility requirements to a TTR strategy that we have detailed here:

  1. Starting a TTR pension could affect you or your partner’s government benefits.  
  2. It can be difficult to set up, so we recommend talking with a financial advisor or your superfund.  
  3. It is a “non-commutable” income stream, so, it cannot be taken as a lump sum.  
  4. You must have reached “preservation age”, which is generally over age 60, though in some cases it is available to people over age 55 (this is being phased out so it will be 60+ for everyone).  
  5. It could impact the life insurance cover you have within your super.  
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Saving on tax and saving for retirement

If you are trying to save more for your retirement, a TTR account could allow you to contribute more of your pay to your superfund. This will result in you saving on tax if set up correctlyand the TTR account can top up any additional income contributed to super and leave you with the same take home pay. 

 

Coordinating a salary sacrifice payment with your employer or making a post-tax contribution to super and then receiving a tax deduction has you putting more away for retirement. Setting this up to ensure you are receiving the same take home pay with your TTR account, and the tax saved, can be difficult and we only recommend doing this with the advice of a financial planner.  

 

We have shown how this could work for an individual over a 5-year period.

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Growing your super and plan for retirement

We think planning for retirement is the most important component of financial advice because this is when you will rely on your assets to fund your income needs. Super is purpose-built for retirement and is one way we approach lowering your tax bill, with concessional and non-concessional contributions to your superannuation. 

 

We believe in personalising investment portfolios and financial plans for our clients. We centre these plans around what our clients want to achieve and where they see themselves in retirement.  

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Get started with your free strategy consultation and receive a copy of the MOST IN DEMAND Good Fortune Guide – written by Certified Financial Planner of the year 2020 national finalist, to help educate you on your financial plan.