Transition to retirement

Transition to retirement rules

Under the transition to retirement rules, when you reach your preservation age, you may be able to reduce your working hours without reducing your income. You can do this by choosing to start a transition to retirement income stream (TRIS).

The TRIS payment tops up your part-time income with a regular ‘income stream’ from your super savings. Previously, you could only access your super once you were 65 years old or retired.

For more information on the changes to transition to retirement income streams from 1 July 2017, see GN 2019/1 – Changes to transition-to-retirement income streams.

Under these rules, you can only access your super benefits as a ‘non-commutable’ income stream. A non-commutable income stream is one that you can’t convert into a lump sum. This generally means you can’t take your benefits as a lump sum cash payment while you are still working. You must take your super benefits as regular payments.

Super guarantee contributions and TRIS

Employers still need to make compulsory super guarantee contributions for all their eligible employees. This includes people on a TRIS.

We recommend you talk to us if you’re considering:

  • super withdrawal options

  • how tax applies to your retirement, transition to retirement or superannuation income streams.

If a TRIS is not in the retirement phase:

  • the earnings from the assets supporting the TRIS will not be eligible for exempt current pension income (ECPI), and are taxed at the relevant tax rate

  • it will not count towards your transfer balance cap (until it goes into the retirement phase).

A TRIS isn’t in the retirement phase until you meet one of the following conditions of release:

  • you’re 65 years old or older

  • retirement

  • permanent incapacity

  • terminal illness.

For more information, give us a call.

Source: ato.gov.au
Reproduced with the permission of the Australian Tax Office. This article was originally published on https://www.ato.gov.au/Individuals/Jobs-and-employment-types/Working-as-an-employee/Leaving-the-workforce/Transition-to-retirement/
.

Important:
This provides general information and hasn’t taken your circumstances into account.  It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person. 

Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

Facebook
Twitter
LinkedIn

Latest Posts