Retire with more or retire sooner?

The choice is yours with a Transition to Retirement strategy.


Want to ease yourself into retirement? A Transition to Retirement strategy may allow you to work less for the same income.

By moving your super into a retirement account, you can access extra income to top up the reduction in your take-home pay. It is important to understand that this option can eat into your retirement savings.


  • Ease into retirement by reducing your working hours
  • Take-home pay remains the same
  • Save on tax


How John reduced his working hours without having to reduce his income

John, aged 57, is working full time, earning $75,000 plus his super guarantee contribution. He currently has a balance of $250,000 in his iQ Super account.

John is looking for a lifestyle change, and has been considering reducing his working hours to 25 hours per week.

John decides that he is going to set up an iQ Retirement account so he can take an income stream from his super to replace the reduction in his salary.

By starting a Transition to Retirement strategy, John pays $4,006 less tax. This enables him to work 10 hours less, but maintain the same take-home pay.

This strategy does come at a price as John’s retirement savings will reduce over time as he draws down pension payments. He has factored this into his long-term retirement income plans.

  Current situation With a TTR
Gross income $75,000 $53,500
Add TTR payment $0 $17,494
Taxable income $75,000 $70,994
Less tax payable ($17,422) ($13,416)
TAKE HOME PAY $57,578 $57,578
The illustration above is based on the tax rates and limits applying for the financial year 2016/17 (Income Tax includes the Medicare Levy). The superannuation guarantee is 9.5% and, for the 2016/17 financial year an individual under the age of 49 can make a before-tax contribution to super of up to $30,000, or $35,000 for those aged 49 or over on the last day of the previous financial year. For the 2017/18 financial year an individual can make a before-tax contribution of $25,000. Low income tax offsets have been ignored for the purpose of the above illustration. Source: Russell Investments. This illustration is general in nature and is not prepared having regard to your objectives financial situation or personal needs.