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What is a transition to retirement strategy?

A transition to retirement (TTR) strategy is ideal for those Australians looking to ease into retirement by slowly reducing their working hours.

It is the kind of pre-retirement strategy that allows individuals to continue working while drawing down some of their superannuation benefits at the same time.

TTR uses a portion of an individual’s super to create an additional income stream (a retirement income account) while they are still working. The super account continues to receive contributions from the individual’s employer and any before-tax (salary sacrifice) contributions. The retirement income account uses some of the super savings to provide regular payments that top up the individual’s income.

Prior to the government introducing the TTR strategy, an individual could only access their super fund once they turned 65 or retired. Under the new TTR rules, an individual must be over the age of 55 and under the age of 65 to access the strategy.

The benefit of a TTR strategy is the fact that an individual can boost their superannuation savings while easing into retirement and pay less tax at the same time.

The investments in the super fund are free of CGT and earnings tax while an individual draws on their super, so a transition to retirement income stream provides some benefits beyond saving income tax.

Posted on 15 October '15 by , under Super.

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What to consider when consolidating your super

The ATO reported that 45% of working Australians were not aware that they had multiple super accounts in 2016. Having multiple super accounts is particularly common for individuals who have had more than one job. If this is you, it is important to identify and manage your super accounts because having more than one can be costly as a result of account fees from multiple funds.To combat this, you may want to consolidate your super, which moves all your super into one account. Not only does this save on fees, but it also makes your super easier to manage and keep track of.

Before consolidating your super, it is important to do the following:

Research your funds' policy
Compare your active super accounts so you can make the right choice about which one you should close. Things to assess include:

  • Exit fees
  • Insurance policies
  • Investment options
  • Ongoing service fees
  • Performance of the funds

Check employer contributions
Changing funds may affect how much your employer contributes, as some employers contribute more to certain funds. Check your current accounts to see if changing funds will affect this. Once you have selected a super fund, regardless of whether you choose a new super fund or one of your existing ones, provide your employer with the details they need to pay super into your selected account.

Gather the relevant information
When consolidating your super, you will need to have the following details ready:

  • Your tax file number.
  • Proof of identity. This could include your driver's license, birth certificate or passport.
  • Your fund's superannuation product identification number (SPIN).
  • Your fund's unique superannuation identifier (USI).
  • Details of your previous fund.

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