This article explains how Transition to Retirement pensions will change post-1 July 2017 and identifies three scenarios where this strategy might still be used to great benefit.
Thanks to changes to superannuation, from 1 July 2017 Transition to Retirement (TTR) pensions will lose a little of their gloss. Instead of the earnings on the investments that support the pension being exempt from tax they will be taxed at 15%. This applies to both new and existing pensions.
However, that’s about the extent of the bad news. For those over 60, the pension payments will remain tax-free and TTR strategies can continue to provide a number of benefits for people nearing retirement. Let’s look at some options available to 62-year-old accountant, Brian. He works full time and is on an annual salary of $100,000.
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