Transition to Retirement Pension: What Is It & How Does It Work?
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- Опубликовано: 22 июл 2024
- Understand how a TTR Pension works so that you can maximise your wealth as you transition into retirement. An essential watch for anyone in their late 50s or early 60s.
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⏱ Timestamps
00:00 - Transition to Retirement Pension
01:40 - What is a TTR Pension?
03:05 - Superannuation Preservation Age
03:56 - TTR Pension Example
06:16 - Tax on TTR Pension Earnings
07:25 - Tax on TTR Pension Income
09:50 - TTR Pension Considerations
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- Transition to Retirement Pension: What is it & How Does it Work? -
A Transition to Retirement (TTR) Pension is a way of accessing your superannuation while you are still working.
A TTR Pension works by converting your super accumulation balance into an income stream to provide you with income that can supplement reduced working hours, implement tax-effective strategies or help you reduce debt in the lead-up to retirement.
In my opinion, the TTR Pension is the single greatest component of Australia's superannuation system.
This video explains how a TTR Pension works, when you can start one, a TTR Pension example and tax on TTR pension earnings and income.
#SuperGuy #ChrisStrano #Superannuation #RetirementPlanning
DISCLAIMER: The SuperGuy website and SuperGuy RUclips channel contains general advice only. It is not personal advice as it does not take your specific needs or circumstances into consideration. Therefore, you should look at your own financial position, objectives and requirements and seek personal financial advice before making any financial decisions.
General advice is provided by Toro Wealth Pty Ltd trading as SuperGuy Retirement Experts as an Authorised Representative of Core Value FA Pty Ltd (AFSL 480387).
Before acting on any information, you should seek professional advice and verify our interpretation/s before relying on the content or calculators within this website or on the videos, while also considering its appropriateness in relation to your personal situation.
![Superannuation Tax Changes at Age 60: What You Need To Know [Australia]](http://i.ytimg.com/vi/h7F7Fc_ZpnE/mqdefault.jpg)
![Superannuation Tax Changes at Age 60: What You Need To Know [Australia]](/img/tr.png)
Great, thanks heaps Chris.
My pleasure!
Such helpful advice thank you so much.
Question I am now 60 full time employment, happy to keep working full time for a few years, but can I start a TTR pension now and keep working full time and use the pension payments from the TTR to pay down my home mortgage?
Thank you.
You're welcome!
Good information, thank you. One question - if you transfer a portion of your funds to TTR and your TTR starts to run out of money before age 65, can you transfer more from the accumulation fund?
Hi Chris.....Can you contribute some of the unused income from the yearly TTR and re-contribute it back to your standard accumalation super and is there any tax applied if it is seen as a personal deposit
When converting to a TTR pension, are the assets (property/shares/cash) that were held in the accumulation liable for CGT or Stamp duty etc?
The pension transfer cap is $1.9m this year. If one transfers $1.9m into the TTR at 60 and 7 years later at 67, the transfer cap had moved to $2.3m. Would one be able to transfer another $400k into the normal pension fund together with the remaining fund that was in the TTR?
So if you're over 60, is the TTR pension tax free irrespective of whether the components are taxable or tax free?
Thank you for your Contribution, great video. I'm 59 yrs old and currently on workers compensation and still getting low income from the insurance company. Can I apply to TTR small amount lump sum payment.?
A TTR pension allows you to receive pension payments of between 4% and 10% of your account balance each financial year - but this can usually be received as a one-off payment per year. Just be mindful of tax on withdrawals under age 60. Also, make sure you understand the risks of starting a TTR pension. Seek professional advice first. If you do not already have a trusted adviser, feel free to get in touch with us here www.torowealth.com.au
Hi Chris, I have a SMSF and I'm 60 yrs old and planning to start my TTR this year .My question is if I start TTR this year? And fully stop working early 2025 and withdraw all my super money, is it possible?
If we have an investment property within our SMSF worth 750 K can the value of this property go into the TTR pension. I am 60 but my wife is 48. Thanks, Alan
Apart from having to reach preservation age, what other requirements are need to access TTR? Mainly, Do i need to go part time or can I remain full time whilst accessing TTR? Thanks
You can remain full-time. There are generally no other requirements. Feel free to get in touch with us here www.torowealth.com.au/ if you would like personal advice in relation to transitioning into retirement
Hi Chris, really useful. If I start a TTR at aged 60, and continue working and contributing to the accumulation fund (adding SG + concessional contributions [claiming a tax deduction for this] + ECC [upto $120,000 from next year ?] - is this correct ? Then at age 65 my transfer balance cap is set, because my TTR comes to an end ? My transfer balance cap is set for life ? My pension phase balance becomes my accumulation balance + TTR ?
Cheers, David
Thanks for your video😊 would it be an advantage for my still full time working husband (65) to draw the TTR pension to cover my part time work salary and have all of my pay ( about 25,000) added straight to my super? I’m 62 btw. Thanks 😊
Hi Deanne, adding your pay straight into super incurs contributions tax of 15%, so this may not be beneficial if 15% is higher than your marginal tax rate. There are other considerations also. There is likely to be better options available to you. Based on your respective ages, I think personal advice could be beneficial. If this is of interest and you don't already have a trusted adviser, feel free to arrange an complimentary Zoom consultation with us by clicking here calendly.com/torowealth/initial-video-call
Can you take the 10% from a TTR as a lump sum each year?
What are the normal fees charged for a TTP Also if you are still working and paying into super do those payments then go into your TTP and cancel insurances?
Do you mean super fund fees or advice fees on whether you should or shouldn't start a TTR Pension? TTR Pension accounts cannot receive contributions. All contributions must be made into an accumulation account. It is very important to be mindful of any insurances before you start a TTR and even consider leaving a sufficient balance in your accumulation account, so that the account remains open and insurances remain in place. You should really be seeking professional advice before starting a TTR Pension. Feel free to get in touch with us here if you like www.torowealth.com.au/
I'm 59 and considering a ttp. I have 2 industry super fund accounts. The first contains before tax contributions and the second contains only after tax contributions. If I go ttp, can I draw down only on the first account to minimize beneficiary tax in the future and leave the second in accumulation until reaching 65. Also, my wife is 55 with similar accounts. Can she ttp the after tax only fund and pay no tax due to the tax free contributions it contains.
is there a video on tax on super lumpsum withdrawls > 60 yrs of age? clarification? please. thankyou, and how much can you earn to supplement ? tax implications?
This article explains tax on lump sum super withdrawals superguy.com.au/superannuation/super-lump-sum-tax-withdrawals/
Thanks Chris. I've just discovered your very informative videos. Quick question: If I'm receiving a TTR pension tax free does that mean my wage or salary earnings are simply taxed as normal?
Glad you like the vids! Yes, that's correct.
@@SuperGuyAu so if I salary sacrifice into super the same amount as I'm taking out as a ttr that means I pay less tax, right?
After commence a TTR pension account, (in SMSF), can the person continue to contribute $27.5k / year to a separate accumulation account to reduce gross income?
I look forward to start TTR once reaching 60 because I can start withdraw 4% each year. The fund makes more than 4% so the balance won't reduce but that 4% is going to nearly match my net salary. Then I can either work less, or stay the same but use those extra for many purposes.
Yes, generally a SMSF can run a TTR pension and accumulation account simultaneously. However, you will need to check the SMSF Trust Deed for rules specific to your fund.
Can you still work full time say 38 hrs a week but start salary sacrifice say 5 per cent instead of reducing hrs as an option to start a TTR at age 60
Does the 12 per cent SG as of July 1 still go to my accumulation fund even if I set up a TTR account . I currently have a SMSF linked to shares
Yes to all. But check with your SMSF accountant/administrator.
So does that mean you don't actually pay any tax if you are receiving a tax fee component and then you get an offset against the taxable component?
It depends on your other forms and amounts of taxable income and the level of taxable component pension income received.
do i contact my super people to set up the account?
It might be worth getting personal advice first, in order to ensure such a strategy is appropriate. We offer this through our advice firm, Toro Wealth www.torowealth.com.au Otherwise, yes, you can contact your super fund and ask the process involved. Just be mindful of the implications.
TTR is a great option if your employer agrees to it , in my situation my employer denied my request.
Your employer doesn't have to agree to salary sacrifice and you are free to draw a pension (obviously subject to the rules) so you can follow this strategy to boost super of disposable income. You may be referring to your employer not agreeing to reduced hours which of course they do have to agree to.
If you have started your TTR less than a month before the end of the financial year, can you access 10% of the amount transferred?
Hi Cecilia, I am not aware of a law prohibiting this. However, you might need to be mindful of whether it contravenes early access rules. For example, if you started the TTR in June, then transferred it back to accumulation in July - it may signify your actions were performed for reasons other than what the TTR pension is generally intended for. Again, this is not necessarily illegal either, but just something to be mindful of.
The best TTR is where you can reduce your hours without needing to touch your super until you fully retire.
I can understand your reasoning behind saying this, but there are actually several financial benefits to commencing a TTR pension prior to retirement.
After 60 and retired, you decided to draw down a pension from your super. Can you still make contributions to your super and would they be tax free? TIA
@@SuperGuyAu Could you elaborate on those benefits? Thanks.
@@w0mblemania Sure, here is an article hat explains them superguy.com.au/transition-to-retirement/transition-to-retirement-pension-over-60/
@@freeasabird5187 Yes, the income would still be tax free. The contributions may incur tax upon entry to the fund, depending on the type of contribution.
Hi, TTR ? Wife is 60. Super balance $310k $60 k income @ I’m 59 super balance $350k $50k income
Sooo simple - thank you government
!!