Reduce your working hours and access your super as additional income when you reach your preservation age.

Once you hit your preservation age, sometime between 57 and 60, depending on the year you were born, you have the option to access your super and continue working full or part time.

It’s called a ‘transition to retirement income stream’ (TRIS for short) and people choose it for a few reasons.

You might just love what you do, or you might need to work because of financial commitments.

Or you might simply prefer to slowly dial down your day job rather than stop overnight.

Either way, starting up a TRIS can be a highly tax-effective strategy to prepare for life after work.

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How transitioning can work for you

Choosing a TRIS might be a good option on a personal front, but it could also have some financial benefits because of tax breaks.

If you reduce your hours, supplementing your income with super could mean you don’t take home any less in your pocket each month.

Or you can work full time and get the tax benefits of salary sacrificing into your super fund.

So while you may be drawing down from part of your super, you’re topping up as you go.

Tell me more about tax and stopping full-time work


 

This scenario has been included for demonstrative purposes and includes general information and financial projections based on assumptions about the future. These figures do not take into account your specific objectives, financial situation or needs. It is recommended that you consult with a financial planner who can take into account your personal circumstances.

  • This scenario is based on a 60 year old with a commencing super balance of $200,000.
  • Salary $60,000, plus Super Guarantee of 9.5%  
  • SG and salary sacrifice contributions are taxed at 15% when added to super, instead of an individual’s tax rate
  • Because the member is 60 years of age, there is no tax on pension payments drawn from a TRIS
  • The maximum that can be drawn down from the transition to retirement income stream each year is 10% of the balance at commencement, this is adjusted each 1 July.
  • The concessional contributions cap is $25,000 p.a.

This case study is for demonstrative purposes and includes general information and financial projections based on assumptions about the future. Results may differ depending on the accuracy of these assumptions, your situation and other factors.

It does not take into account your specific objectives, financial situation or needs. You should consider the information having regard to your personal circumstances. It is recommended that you consult a financial adviser if you require financial advice that takes into account your personal circumstances.

These assumptions have been provided by First State Super Financial Services Pty Ltd ABN 37 096 452 318, AFSL 240019, 1 July 2018.
This information has been prepared by FSS Trustee Corporation, ABN 11 118 202 672, AFSL 293340, the trustee of the First State Superannuation Scheme ABN 53 226 460 365.

Let’s see what happens if Pat has a starting super balance of $100,000. Again Pat is on a salary of $60,000 ($65,700 including super) and decides to open a TRIS. He makes additional concessional contributions to his super account and draws income from his TRIS account to top up his take-home pay.

In the table below Pat is $2,855 a year better off through his TRIS and salary sacrifice arrangement.

If Pat then continues this strategy over the next 10 years till retirement at age 70, Pat can significantly reduce the amount of tax paid and can add an extra $30,370 to superannuation.

Income
Accumulation
and no salary sacrifice
Transition
to retirement strategy in place 
Gross salary (incl. SG) $65,700 $65,700
Less SG contributions @9.5% ($5,700) ($5,700)
Less salary sacrifice $0 ($15,124)
Equals taxable income $60,000 $44,876
Less income tax and Medicare levy ($11,717) ($6,593)
Plus TRIS payments $0 $10,000
Net income (cash flow) $48,283 $48,283
Super balance start $100,000 $100,000
Plus net contributions to super $4,845 $17,700
Less TRIS payments $0 ($10,000)
Super balance after one year (excludes returns) $104,845 $107,700
Benefits to a transition to retirement strategy after one year   $2,855
Benefits to a transition to retirement strategy after ten years   $30,370

Assumptions

This scenario has been included for demonstrative purposes and includes general information and financial projections based on assumptions about the future. These figures do not take into account your specific objectives, financial situation or needs. It is recommended that you consult with a financial planner who can take into account your personal circumstances.

  • Two members; one with a TRIS and the other with no TRIS
  • Members are 60 years of age with a commencing super balance of $100,000
  • Salary $60,000, plus Super Guarantee of 9.5%
  • Same net take-home pay under all scenarios
  • SG and salary sacrifice contributions are taxed at 15% when added to super, instead of an individual’s tax rate
  • Because the member is 60 years of age, there is no tax on pension payments drawn from a TRIS
  • The maximum that can be drawn down from the transition to retirement income stream each year is 10% of the balance at commencement, this is adjusted each 1 July.
  • The concessional contributions cap is $25,000 p.a.

This case study is for demonstrative purposes and includes general information and financial projections based on assumptions about the future. Results may differ depending on the accuracy of these assumptions, your situation and other factors.

It does not take into account your specific objectives, financial situation or needs. You should consider the information having regard to your personal circumstances. It is recommended that you consult a financial adviser if you require financial advice that takes into account your personal circumstances.

These assumptions have been provided by First State Super Financial Services Pty Ltd ABN 37 096 452 318, AFSL 240019, 1 July 2018. This information has been prepared by FSS Trustee Corporation, ABN 11 118 202 672, AFSL 293340, the trustee of the First State Superannuation Scheme ABN 53 226 460 365.

A few things to consider about starting a TRIS

Please read the Transition to Retirement Income Stream Member Booklet before deciding if this is the right product for you.

Once you've set up a transition to retirement income stream, remember:

  • You can’t withdraw your whole super balance as a lump sum.
  • You can withdraw a minimum of 4% and a maximum of 10% of the account balance into a TRIS income stream each year.
  • Drawing down from your super could mean there is less to access when you fully retire.
  • From 60 years of age you don’t pay tax on the pension payments. If you are under 60 years of age pension payments do create taxable income but this is at concessional rates.
  • A maximum investment earnings tax of 15% is applied.

Quality advice changes lives

In 2016, we purchased StatePlus to create one of the largest member-owned financial planning networks in Australia. Combining our financial planning teams means that our members get greater access to trusted advice.

We're here with the right support and advice

We know retirement planning can be complex, so it’s wise to talk to a financial planner. 

StatePlus is a wholly owned financial planning business of First State Super. They can help you determine whether a transition to retirement income stream is right for you. 
 

Book an appointment

What about a tax-free retirement income stream?

Once you retire completely, or you meet one of the other conditions of releaseThis may include: leaving an employer once you turn 60 or you have ceased gainful employment and do not plan to work more than 10 hours a week again, once you have reached your preservation age., you can convert your TRIS to a retirement income stream.

A retirement income stream gives you access to more of your super, offers tax free investment returns and income withdrawals and has more flexible lump-sum payment rules.

I want to learn more about a retirement income stream

Preservation age

Your preservation age depends on your date of birth and can impact when you can access your super through an income stream.

Date of birth Preservation age (years)
Before 1 July 1960 55
1 July 1960 – 30 June 1961 56
1 July 1961 – 30 June 1962 57
1 July 1962 – 30 June 1963 58
1 July 1963 – 30 June 1964 59
After 30 June 1964 60

Learn more about TRIS

Which pension is right for you?

552.3KB PDF

Moving your TRIS to a RIS

145.6KB PDF

Complete this form to convert your TRIS to a RIS

263KB PDF

Accessing your super

262.9KB PDF

Transition to Retirement Income Stream Member Booklet

4.5MB PDF

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FSS Trustee Corporation ABN 11 118 202 672, AFSL 293340, is the trustee of the First State Superannuation Scheme ABN 53 226 460 365 (First State Super). This is general information only and does not take into account your specific objectives, financial situation or needs. General advice is provided by First State Super, ABN 53 226 460 365 and State Super Financial Services Australia Limited, trading as StatePlus, ABN 86 003 742 756, AFSL No. 238430. StatePlus is a wholly owned company of First State Super. Financial planning advice is provided by StatePlus or First State Super Financial Services Pty Ltd, ABN 37 096 452 318, AFSL 240019. You should consider the Member Booklet (Product Disclosure Statement) for the product you hold or intend holding before making any decisions. Call Customer Service on 1300 650 873 for a copy, free of charge, or visit firststatesuper.com.au.