Back to Retirement

See how a TTR account can work for you

Want more out of life? You could boost your super or reduce your work hours without affecting your take home pay.

Back to Retirement

1. Use it to boost your super

If you’re at preservation age (see below) or over and still working, a Rest Pension TTR (Transition to Retirement) account could be one way to boost your super or reduce your working hours while maintaining similar take home pay. With a TTR account you could:

 

· Pay less tax on your super contributions - Employer contributions and salary sacrifice contributions are generally taxed at a rate of 15%, which may be lower than the tax rate applied to your personal income.

· Pay less tax on your income - If you’re 60 or over, your pension payments will be tax free.

2. Use a TTR account to reduce work hours and maintain income

A TTR account can be used to supplement your salary income if you reduce your work hours. This can also be set up so that you have the same take home pay as you did before you reduced your work hours.
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Need Advice?

Rest Advice is here to help you make the most of your retirement. Find out if a TTR account is right for you. Call us on 1300 183 361.

Find out more

View the case studies below to see how a TTR strategy can be used to:

Boost your super

Case Study 1: Jerry increases his super savings with a TTR

Jerry (age 60) has $175,000 in super and is looking to boost his super before retirement at age 65.
 
Jerry would like to maintain his existing take home pay so he can enjoy the same lifestyle and pay his bills. Jerry arranges through his employer to salary sacrifice $19,215 per annum into his super, and starts a Rest Pension transition to retirement account using $170,000 of his super, drawing $13,260 from his Rest Pension account per annum.
 

How Jerry’s cashflow might look

  Existing With a Rest Pension TTR account
Salary $60,000 $60,000
Less Salary Sacrifice - $19,215
TTR Income - $13,260
Taxable Income $60,000 $40,785
Tax $9,967 $4,291
Medicare Levy $1,200 $816
Tax Offsets* $1,180 $1,075
Total Tax $9,967 $4,032
Net income Received $50,013 $50,013
* Low Income Tax Offset (LITO) and Low & Middle Income Tax Offset (LMITO)

 

How Jerry’s super might look after one year

  Existing With a Rest Pension TTR account
Super    
Super starting balance $175,000 $5,000
Super Guarantee $5,700 $5,700
Salary Sacrifice - $19,215
Earnings $8,509 $703
Less Contributions and Earnings tax $1,536 $3,793
TTR    
TTR Start Balance - $170,000
Income Draw Down - $13,260
Earnings from TTR (net of tax) - $7,243
Total End Balance (Super + TTR) $187,673 $190,807

Jerry reduces his annual personal tax bill by $5,935 and increases his total superannuation (including accumulation and TTR) by $3,134 after one year.
 
Case Study Assumptions:
  • Inflation or CPI (Consumer Price Index) - 2%
  • Salary is indexed to AWOTE (Average weekly ordinary time earnings) - 3.2%
  • Super Guarantee contributions - 9.5%
  • Tax rates (2020-21) are not indexed
  • Assumed net return for super and TTR accounts - 4.5%
  • Fees are not taken into account in this case study.
Reduce your work hours whilst maintaining income

Case study 2: Elaine cuts work hours and maintains her income with a TTR

Elaine (age 60) works full time, and is looking to cut down her work hours to four days a week. She would like to consider starting a Rest Pension TTR account to maintain her existing salary. Her current super balance is $150,000.
 
Proposed Financial Position (2020-21)
 
  Option 1 - Current situation Option 2 - Cut back hours to four days Option 3 - Cut back hours to four days and start Rest Pension TTR account with super balance
Salary $50,000 $40,000 $40,000
TTR payment - - $7,500
Total Income $50,000 $40,000 $47,500
Taxable Income $50,000 $40,000 $40,000
Less Tax (total tax liability)* $6,387 $3,887 $3,887
Net Income $43,613 $36,113 $43,613
Super Balance after 5 years $212,226 $207,019 $165,233
​* Income tax plus Medicare levy, less Low Income Tax Offset (LITO) and Low & Middle Income Tax Offset (LMITO)

Under option 3, Elaine can maintain her current net income, however she may need to think about how a TTR strategy will impact her super savings at retirement.
 
Case Study Assumptions:
  • Inflation or CPI (Consumer Price Index) - 2%
  • Salary is indexed to AWOTE (Average weekly ordinary time earnings) - 3.2%
  • Super Guarantee contributions - 9.5% (2020-21), includes legislated increases to SG
  • Tax rates (2020-21) are not indexed
  • Assumed net return for super and TTR is 4.5%
  • Fees are not taken into account in this case study.
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Super and Retirement Calculator

See how a Transition to Retirement strategy can help you make the most of your super in the lead up to retirement.

Calculator

 

Who does a Transition to Retirement strategy suit?

A Rest Pension TTR account may be suitable if you have reached your preservation age and you:

 Are still in the workforce
 Have existing super benefits
 Want to boost your super
 Are transitioning to retirement.

 

Your preservation age is the age in which you may access your super, and depends on the year you were born.

Date of birth Preservation age  
Before 1 July 1960 55  
1 July 1960 - 30 June 1961 56  
1 July 1961 - 30 June 1962 57  
1 July 1962 - 30 June 1963 58  
1 July 1963 - 30 June 1964 59  
From 1 July 1964 60  

For more information about TTR accounts, please see our Super facts & figures

What are the key things to know?

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Taking out super

You can only withdraw your super from a TTR account as income payments.

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Payment limits

You can receive between a minimum of 2% and a maximum of 10% pa of your TTR account balance (for the 2019-20 and 2020-21 income years).

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Keep your account open

Still working and want to remain insured? Keep your super account open so you maintain your insurance cover.

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Contribution caps

If you have a TTR account and decide to make salary contributions to your super account, be mindful of contribution caps.