Transition to Retirement Calculator


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How does it work?

Transition to retirement can only be implemented by those who have reached preservation age. Your "Preservation Age" is determined by your date of birth (please refer to the Preservation Age table for specific details).

A transition to retirement strategy can help you by allowing you to establish a pre-retirement pension. This pension facility is established using your own superannuation benefits and is paid to you as an income stream whilst you are still in the workforce. The amount of pension you are able to draw down is dependent on a number of factors including your current superannuation balance and your own personal financial position.

A pre-retirement pension allows you to draw a regular income from your super while you’re still working, provided you have reached your preservation age. There are restrictions on accessing your super as a lump sum during this pre-retirement phase.

There are a number of techniques for boosting your super with pre-retirement pensions. For example, you might decide to continue working full time while drawing the minimum preretirement pension from your super balance. This would, of course, give you more income than you need. To reduce your income down to its previous level, you could salary sacrifice to your Super an amount equivalent to the pre-retirement pension you are drawing whilst taking care not to exceed the relevant concessional contribution cap. This would maintain your after tax income while offsetting the reduction in your retirement savings from the pension payments.

Salary sacrificing reduces your taxable income, which may in turn decrease the amount of tax you have to pay. In addition, salary sacrifice contributions are taxed at just 15% when they enter the fund and investment earnings in the fund are also taxed at up to 15%, compared to the marginal tax rate for investments outside super.