Many Australians are now choosing to take advantage of the Transition to Retirement (TTR) rules. TTR means you can access your super through an income stream product while you’re still working.
This option is available to all super fund members upon reaching preservation age (for a person born before 1 July 1960, this is age 55).
How does TTR work?
HESTA’s TTR option, our working income stream, can offer you the lifestyle flexibility you need to enjoy working for a longer period while supplementing your income from your super. It can also reduce your current and future tax burdens and help fund salary sacrifice super contributions from your present wage income.
It doesn’t affect your ability to contribute to your existing super.
In addition, once you start a TTR income stream, the income your fund earns is not subject to the 15% tax rate that applies to money invested in a pre-retirement super fund.
Download the Transition to retirement information flyer for more information.
Restrictions/conditions of release
The main restriction when you choose the working income stream option is that you can’t take it as a lump-sum payout except for limited purposes, or until you satisfy a condition of release.
Conditions of release include any of the following:
- permanent retirement from the workforce on or after your preservation age (currently 55 for people born before 1July 1960)
- ceasing current employment on or after age 60
- attaining age 65, whether working or not, or
- permanent incapacity or death.
Otherwise, you can also only receive a maximum of 10% of your account balance in one year.
What happens when I fully retire?
When you retire permanently or meet one of the other conditions of release listed above, you can convert your working income stream option to the retirement income stream option. This means you’ll have access to the more flexible lump-sum payment rules that apply.
You may also use any additional funds then accumulated in your pre-retirement super account to start another income stream (subject to normal conditions and costs).
Read our HESTA Super Income Stream - Product Disclosure Statement for full details.
Note: we also recommend you seek professional advice to help you decide whether using the new TTR rules is appropriate for you.