Ease into retirement

Starting a TTR arrangement before age 60

This depends on your date of birth, as shown in the table:

Provides regular income

Broadly, once you’ve transferred the nominated portion of your super into an EATS or TTR arrangement, you can draw regular income payments from it. The amount you are allowed to draw is subject to Government limits, and you cannot “cash out” the balance until you retire from employment after your preservation age or you reach age 65.

If you are age 60 or over, your income payments are tax free.

If you are under age 60, tax will automatically be deducted from your regular income payments on a PAYG basis, in the same way as tax is deducted from your salary as an employee. However, if you are between your Commonwealth Government Preservation age and age 60, you can claim a 15% rebate on income payments made to you (less any tax-free amount).

• Although there are benefits to using a TTR or EATS arrangement to help you phase into retirement, drawing income payments also reduces your retirement savings. There is no guaranteed payment period with an income stream, so you can receive payments until your account balance is used up.

• While you continue to work, your employer will pay Superannuation contributions to your super, helping it to grow. You can also choose to make contributions to keep building your retirement savings, for example by having some of your salary paid directly to super via salary sacrifice.

And of course, the amount that stays invested in your super and Income Stream accounts continue to earn investment returns. The investment earnings in your Income Stream account are taxed at up to 15%. The actual rate of tax may be reduced below 15% because of various tax credits and rebates. However once you retire or reach the age of 65, the investment returns in your Income Stream account will be tax free.

• The initial investment figure of $200,000 represents the amount after any tax deductions on rolling over from Triple S to the Income Stream.
• Income figures have been rounded to the nearest $10.
• After-tax income calculations also include a reduction for the Medicare Levy.
• The 2020/21 financial year tax rules have been used.
• The examples take into account the low and middle income earner tax offset.
• This calculation applies to the first year of the income stream only. The income payments for each year will need to be reviewed to ensure it meets the minimum payment amount and maximum amount for transition to retirement arrangements.
• Fees and investment returns will also impact the benefit of adopting the strategy.
• Income Stream investment earnings continue to be taxed at a maximum rate of 15% until retirement or age 65.
• Part 2 of the example (at age 58) assumes the entire income stream account is taxable, therefore income payments are taxed at marginal rate less a 15% tax offset.

The Super SA Income Stream is only available to Super SA members and their spouses.

The TTR and EATS facility of the Income Stream allows you to draw a regular income to add to your take-home pay as you phase into retirement.

With the Income Stream account, you can also continue to invest your money in a tax-effective super environment, choosing from the several investment options available. It offers competitive administration fees and the flexibility to open an account using super from within Super SA or from another fund. However, you must first combine your accounts before commencing an Income Stream.

If you are a Triple S member, you can use EATS to help you ease into retirement by reducing your working hours (if you wish) and drawing a regular income to make up for any shortfall.

If you are a Lump Sum or Pension Scheme member, you have the ability to use TTR only if you reduce your hours of employment or salary.