If you’re aged 55 or over, there’s a way you could grow your super faster without reducing your income. It’s a simple three step process which could add thousands of dollars to your retirement nest egg over time, thanks to some significant tax benefits.
A Transition into Retirement Pension (TRP) is a special type of income stream that lets you access your super benefits before you retire. You can do this when you reach your "preservation age". This varies depending on your date of birth, but if you were born before 1 July 1960, your preservation age is 55.
Limits apply to the amount of income you can receive each year and lump sum withdrawals can only be made in certain circumstances.
How it works?
- Sacrifice part of your prospective pre-tax salary directly into a super fund;
- Invest some of your existing super into a TRP; and
- Use the regular payments from the TRP to replace the income you sacrifice into super.