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What is your preservation age?

Superannuation laws can be confusing for everyone. These procedures often make it difficult to work out when you can retire or if there are any special conditions you need to meet before you can claim your funds. Every individual needs to be aware of their preservation age and regulations when accessing their superannuation benefits.

A person’s preservation age differs from the Age Pension. Age Pension is separate to your super and is a scheme which pays out a consistent income to help cope with the costs of living once you have retired. This age in Australia is 65 and not everyone is eligible for this system. Preservation age, however, is the age at which you can retire and access superannuation benefits. This age depends on your birth year.

Normally, accessing super benefits requires an individual to meet two conditions; reaching their preservation age and retiring from the workforce. Those who reach their preservation age but don’t intend to retire must meet other criteria to have access to their benefits

Posted on 1 April '19 by , under Super.

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Transition to retirement

The transition to retirement (TTR) strategy allows you to access some of your super while you continue to work.

You are able to use the TTR strategy if you are aged 55 to 60. You can use it to supplement your income if you reduce your work hours or boost your super and save on tax while you keep working full time.

  • Starting a TTR pension: To start your TTR pension, transfer some of your super to an account-based pension. You have to keep some money in your super account so that you can continue to receive your employer's compulsory contributions as well as any voluntary contributions you may be making.
  • Government benefits and TTR: The benefits you or your partner receive might be impacted if you choose to opt for this strategy. How and what exactly will change might become clearer upon discussing this with a Financial Information Service (FIS) officer.
  • Life insurance and TTR: In some cases, the life insurance cover you have with your super may stop or reduce if you start a TTR pension – check this before making any decisions or changes.

TTR can help ease your mind as you transition into retirement but it can be a bit complex. Before you choose whether you want to use TTR to reduce work hours or save on tax, or even if you want to use TTR altogether, you should figure out how this will impact all aspects of your finances.

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