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All Articles News Superannuation Retirement Finances Investments Career Wellbeing
News Hub Retirement

Pros and cons of a transition to retirement strategy

Finance Investments Superannuation
07 April 2020 5 min read

A transition to retirement (TTR) strategy is where you receive an income stream from your super while you’re still working. Accessing some of your super in the lead up to retirement has the potential to give you a better work-life balance while still maintaining your current income, or giving your super savings an extra boost.

banner ttr

Transitioning to retirement

Whether you decide to use a transition to retirement pension – such as the QSuper Transition to Retirement Income account – to work less or grow your super savings, it's important to consider whether a TTR strategy is right for you.

Here are some of the advantages and disadvantages of having a TTR strategy.

Transition to retirement benefits

There are a number of benefits to using a TTR strategy.

Work less Work less

With a transition to retirement income stream, you may be able to work less – such as part-time or on a casual basis – while still maintaining your current lifestyle. With this new-found free time, you could do more of the things you love, like spending time with your grandchildren or ticking adventures off your bucket list.

Chase your passion Chase your passion

Whether you decide to take on volunteering or a mentor role, or simply choose to switch to a more stress-free, lower paid job at the end of your career, a TTR pension could help supplement your income.

Pay off debt Pay off debt

You could use the extra income being drawn from your super to get ahead by paying off a debt, such as a credit card or car loan.

Save on tax Save on tax

If you earn more than $37,000 a year, it could benefit you to salary sacrifice more of your before-tax salary into your super and supplement your pay with tax-effective payments.

Grow your retirement savings Grow your retirement savings

Don't want to stop working just yet? A TTR strategy could help you grow your super in those last few critical years. Because you're still working, your superannuation balance will continue to receive contributions, which could help make all the difference to your lifestyle when you retire.

Transition to retirement disadvantages

A TTR strategy isn’t for everyone. Here are some of the things to think about.

Contribution limits Contribution limits

There are limits to how much you can tax-effectively contribute to your super, so make sure you understand the contribution caps.

Withdrawal limits Withdrawal limits

With a TTR income stream, you must withdraw at least 4% of your account balance each year, and you can access a maximum of 10% (although the COVID-19 pandemic has led to exceptions for the 2019-20 and 2020-21 financial years). These restrictions mean that you need to consider how much of your super you transfer into your TTR account when you open it. You cannot withdraw a lump sum.

Lower retirement savings Lower retirement savings

You need your savings to last throughout your entire retirement, so the earlier you start spending your super, the faster it's possible to empty your account. Before starting a TTR strategy, you should consider your retirement plan and calculate how long your super will need to last in retirement.


Not sure how long your super will last?

QSuper’s Retirement Income Calculator can show you what super balance you’re tracking towards and what your estimated retirement income will be based on the information that you input.

Calculate my retirement income

Transition to retirement eligibility

You may be able to access your super through a TTR strategy if you:

  • Are under the age of 65
  • Have reached your preservation age
  • Are still working
  • Are an existing QSuper member with a minimum account balance of $30,000 (as well as at least $10,000 in an Accumulation account if you keep working).
Suitcase

Ease into retirement with a QSuper TTR Income account

Find out why thousands of members feel confident about transitioning to retirement with us.

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