Transition to Retirement Pensions

Current legislation allows people between 55 and 65 years of age to have a Transition to Retirement (TTR) pension irrespective of whether they continue to work. 

Transition to Retirement pensions are also referred to as TTR income streams.

Key features of a Transition to Retirement pension include:

• income earned in your superannuation fund is exempt from tax
• you must receive a mandatory pension that draws down your superannuation account balance by between 4-10% p.a.
• it can be commuted at any time
• if you are aged between 55 and 59, the pension paid is taxable if sourced from a taxable component, while pensions paid from the tax free component are non assessable non-exempt income
• if the pension holder is aged 60 or older, the pension is not taxable
• the 15% tax offset is available to the pension holder for any taxable pension income
• at age 65 (or another subsequent condition of release is meet), TTR income streams automatically convert to an Account Based pension.

Because you are now able to access your money at age 55, a Transition to Retirement pension must be considered.