Ease into retirement
Ease into retirement and enjoy the things you love
When planning your retirement you may be considering how you spend your time. You may look to discover a new hobby, rediscover an old one, or find something else you really enjoy. Whatever it is, as you near retirement, you can live your best life by working less and having more time to focus on the things you really love. After all, you’ve worked hard to get here.
Have you reached the Commonwealth Government preservation age?
If you have, you may decide you want to reduce your working hours and access some of your super to supplement your take-home pay. This can be done under an Early Access to Super (EATS), (also known as Transition to Retirement - TTR) arrangement. In the Super SA Income Stream, Lump Sum and Pension Scheme members have access to a TTR arrangement, while Triple S members can use the EATS arrangement.
What is my Commonwealth Government preservation age?
Commonwealth Government Preservation Age
Date of Birth
Commonwealth Govt Preservation Age
Before 1 July 1960 55 1 July 1960 to 30 June 1961 56 1 July 1961 to 30 June 1962 57 1 July 1962 to 30 June 1963 58 1 July 1963 to 30 June 1964 59 After 30 June 1964 60
How does a TTR arrangement work?
A TTR arrangement provides regular income.1
Broadly, once you've transferred the nominated portion of your super into an EATS or TTR arrangement, you can draw regular income payments from it. The amount you are allowed to draw is subject to Government limits, and you cannot “cash out” the balance until you retire from employment after your preservation age or you reach age 65.2
If you are age 60 or over, your income payments are tax free.
If you are under age 60, tax will automatically be deducted from your regular income payments on a PAYG basis, in the same way as tax is deducted from your salary as an employee. However, if you are between your Commonwealth Government Preservation age and age 60, you can claim a 15% rebate on income payments made to you (less any tax-free amount).Note that on rolling over to the Income Stream, 15% tax will be deducted from the untaxed component of your rollover from Triple S or the Lump Sum Scheme.2
Growing your money for retirement
- Although there are benefits to using a TTR or EATS arrangement to help you phase into retirement, drawing income payments also reduces your retirement savings. There is no guaranteed payment period with an income stream, so you can receive payments until your account balance is used up.1
- While you continue to work, your employer will pay Superannuation contributions to your super, helping it to grow. You can also choose to make contributions to keep building your retirement savings, for example by having some of your salary paid directly to super via salary sacrifice.
And of course, the amount that stays invested in your super and Income Stream accounts continue to earn investment returns. The investment earnings in your TTR Income Stream account are taxed at up to 15%. The actual rate of tax may be reduced below 15% because of various tax credits and rebates. However once you retire or reach the age of 65, the investment returns in your Income Stream account will be tax free.
How can you start a TTR with Super SA?
The Super SA Income Stream is only available to Super SA members and their spouses.
The TTR and EATS facility of the Income Stream allows you to draw a regular income to add to your take-home pay as you phase into retirement1.
With the Income Stream account, you can also continue to invest your money in a tax-effective super environment, choosing from the several investment options available. It offers competitive administration fees and the flexibility to open an account using super from within Super SA or from another fund. However, you must first combine your accounts before commencing an Income Stream.
If you are a Triple S member, you can use EATS to help you ease into retirement by reducing your working hours (if you wish) and drawing a regular income to make up for any shortfall.
If you are a Lump Sum or Pension Scheme member, you have the ability to use TTR only if you enter into an agreement with your employer to reduce your hours of employment or salary, with a view to future retirement.
Want to learn more?
If you would like to learn more about how the Super SA Income Stream or EATS can help you to enjoy life as you ease into retirement, click here.
We understand that planning for retirement can be complex. Financial advice is strongly recommended when considering an EATS or TTR arrangement to ensure that it is effective for your individual circumstances. It’s important you are aware that your super may have an effect on the level of benefit you’re entitled to receive from Centrelink in retirement.
For personalised one-on-one advice about your superannuation, speak to a licensed financial planner.
We’re here to help you live your best life. You can contact us by phone or email or register now for a webinar.
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