You can find us at

Tudor Investassure Pty Ltd

From 1 January 2016, our newsletter will no longer appear in this section. We now send via email  - feel free to subscribe by emailing with your name and email address - or you can connect with us via our social media channels.




Newsletter Articles

How to move into retirement and be better off

Posted by Naomi Rosenthal on Monday, July 18, 2011 Under: Superannuation

Move into retirement and be better off

If you’re between 55 and 75, establishing a transition to retirement pension could help you:

  • ease into retirement by reducing your working hours without reducing your income
  • increase your retirement savings without impacting your income if you are still working full time
  • boost your income today so you have more money to cover your everyday living expenses.

‘Transition to retirement’ rules were introduced to allow working Australians aged 55 and over access to their superannuation money while they are still working.

The intention of a transition to retirement pension is to enable workers approaching retirement to ‘transition’ towards retirement by reducing their work hours, and to supplement reduced employment income with pension income. However as there is no requirement for a reduction in working hours to commence a transition to retirement pension, a number of other transition to retirement strategies can be utilised by people who are not scaling back work activities.

Key Features

  • Can be started if you have reached your preservation age (55 if you were born before 1 July 1960)
  • Must use superannuation money
  • Pension payments are capped at 10% pa usually until retirement or attaining age 65
  • Lump sum withdrawals or commutations are generally not allowed

Case Study – Super Booster.

Although it may sound hard to believe, using a transition to retirement pension while still working full time can help boost superannuation savings without reducing your income. That’s more superannuation for when you retire, without having to give up any extra income today.

Roger, aged 55, is an engineer earning $90,000 p.a. He enjoys his job and has no immediate plans to reduce his working hours. He does, however, feel that age 65 would be a good time to retire from the workforce to make the most out of his retirement.

He has a superannuation account balance of $325,000 invested in a balanced option that has historically earned 7% p.a. Roger has heard about the ‘transition to retirement’ rules and is interested to find out how he can benefit.

The strategy

Roger’s financial adviser suggests that he consider establishing a transition to retirement pension. This will mean that Roger will need to salary sacrifice a significant portion of his pre-tax salary into his superannuation account. Roger is initially concerned because he does not want to change his lifestyle or receive a lower take-home income.

His financial adviser explains that by implementing a transition to retirement pension, Roger can supplement his income from his retirement savings while sacrificing a portion of his income into his superannuation. Roger currently receives $67,400 in after-tax income.

Roger’s financial adviser explains that if he salary sacrifices $40,427 p.a., he will still receive $49,573 p.a. in income from his employer. He then explains that Roger can supplement his reduced income with pension payments of $32,500 p.a. from a transition to retirement pension using his existing superannuation savings. This will mean that after tax Roger will still receive $67,400.

Roger is happy that he will receive the same income and continue to live the lifestyle he enjoys, but wants to know how this will benefit his retirement savings. His financial adviser explains that in the first year his net salary sacrifice superannuation contributions exceed his transition to retirement pension payments of $32,500.

This means that in the first year alone Roger’s retirement savings are boosted by an additional $4,329. And it gets better.

When Roger turns 60, the payments from his transition to retirement pension are tax free. This means he can reduce his pension payment amount and increase his retirement savings further.

For example, if Roger was 60, he could still receive the same after-tax income of $67,400 by drawing pension payments of $26,275 and his retirement savings would be boosted by $10,796.

Roger is happy that he will receive the same income and continue to live the lifestyle he enjoys.


Looking for a better retirement future? A transition to retirement strategy could help you reach your financial goals. Contact us on 02 9417 6011 to find out how.


Source: Assumptions: Roger’s superannuation account balance of $325,000 is all taxable and fully preserved. Superannuation Guarantee is assumed unchanged at 9% of the original earnings base. No taxation deductions have been claimed. Qualifying private hospital cover is in place.

The Fine Print: The information provided is of a general nature and does not take into account your personal needs, financial circumstances or objectives. The case studies are hypothetical and are not meant to illustrate the circumstances of any particular individual. Before acting on this information, you should consider the appropriateness of the information, having regard to your needs, financial circumstances and objectives. You should read the relevant PDS and consider whether that particular product is right for you before making a decision to acquire or continue to hold the product.

In : Superannuation 

Tags: "transition to retirement" "save tax" "save money" superannuation super savings "reduce work" 

Connect with us.

Click here to go to our newsletter archive.

Responsibility for the content and opinions expressed herein rests solely with the author and opinions expressed do not necessarily represent the views and opinions of Professional Wealth Services Pty Ltd.
The information on this website is general in nature and may not be relevant to your individual circumstances. You should refrain from doing anything in reliance on this information without first obtaining suitable professional advice. You should obtain and consider a Product Disclosure Statement (PDS) before making any decision to acquire a product.
This information is for Australian residents only.
Whilst care has been exercised, the taxation information contained is provided as a guide only and may not be relied upon. If in doubt, you should seek independent tax advice from a qualified tax adviser.

Privacy Policy - click here.

Tudor Investassure Pty Ltd | ABN 74 881 211 664 | Phone: 02 9455 0655 | Email:

Post: PO Box 1142, North Sydney NSW 2059 | Office: Ground Floor, 100 Walker Street, North Sydney NSW 2060

Corporate Authorised Representative of
Professional Wealth Services Pty Ltd Australian Financial Services Licence No. 312047 ATF Professional Wealth Services Unit Trust | ABN 58 174 609 776
Office: Ground Floor, 100 Walker Street, North Sydney NSW 2060 |