transition to retirement

While there is no set age to retire, most people can generally access their super as an income when they reach 'preservation age'. This is now age 60, unless you meet a condition of release.

Once you reach preservation age, you can generally start taking money out of your super account. It's important to also consider when you'll be financially ready to retire. A HESTA superannuation expert can talk you through retirement options one-on-one or over the phone. If you're a HESTA member, choose a time to chat with one of our superannuation experts now or contact us.

Not a HESTA member but interested in becoming one? Find out what HESTA has to offer.

You need to have reached 'preservation age' (the age you can generally access your super as income). And depending on your super fund, you may need to have a certain amount of money in your super account before you can set up a transition to retirement (TTR) income stream account. For HESTA members, that amount is $50,000.

It’s important to consider how a transition to retirement plan could impact any government payments or other benefits you're receiving now or may be eligible to receive in the future. That is, if you had income from a TTR income stream account coming in, would you lose the ability to receive any other benefits? Your age, super savings, and relevant benefits are important factors when weighing up if a TTR income stream is right for you, whether it’s right now or in the future.

If you’re still working and eligible to transition to retirement, you can set up a transition to retirement (TTR) income stream account.

When you set up a TTR income stream account, you’ll get an income from this account (which comes out of your super savings) as well as your salary while you’re working. Payments from your TTR income stream account are generally taxed less than your income and are completely tax-free once you're over 60.

You may be eligible to open a HESTA Income Stream account if you’ve:

• reached your preservation age and fully retired, or
• stopped working on or after age 60, or
• reached age 65, or
• become permanently incapacitated or terminally ill, or
• been using a TTR income stream while continuing to work and are now ready to stop working.

There are 3 key benefits for setting up a TTR income stream:

1. You can start winding down your working hours while earning some income from your superannuation (so your income and lifestyle may not need to change).
2. Whether you want to keep working the same hours or wind down on the work front, you can continue to boost your retirement savings by making contributions to your super through salary sacrifice.
3. There may also be tax benefits. Income you get from your TTR income stream account is completely tax-free once you're over 60. Plus, if you're adding retirement savings to your super (by making salary sacrifice contributions into your super from the income you're earning from working) this could reduce your tax bill.

If you're eligible to transition to retirement, once you open a HESTA TTR Income Stream account you can start receiving payments (from your super savings) to supplement the income you’ve used to make your salary sacrifice contributions.

There are a few important things to note if you’re considering opening a TTR income stream account:

• You can’t make lump-sum withdrawals until you reach age 65 or meet another condition of release, and
• You can’t receive more than 10% of your account balance in one financial year, unless your super has an unrestricted non-preserved component or until you satisfy a condition of release.

TTR strategies can be complicated, so we suggest you seek advice specific to your individual circumstances before deciding whether it’s right for you. If you're a HESTA member, choose a time to chat with one of our superannuation experts now or contact us.

Not a HESTA member but interested in potentially becoming one? Find out what HESTA has to offer.