How does a TTR strategy impact my superannuation benefits?

Introduction to Transition to Retirement (TTR)
Transition to Retirement (TTR) strategies are designed to help Australians manage their transition from full-time work to retirement. These strategies involve accessing superannuation benefits while still working, offering flexibility and potential tax advantages. Understanding how a TTR strategy impacts your superannuation benefits is crucial for making informed financial decisions.
What is a TTR Strategy?
A TTR strategy allows individuals who have reached their preservation age (currently between 55 and 60, depending on birth date) to access a portion of their superannuation benefits through a TTR pension while still working. This approach can provide additional income to reduce working hours or boost savings.
Key Elements of a TTR Strategy
Preservation Age: The age at which you can start a TTR strategy is your preservation age. It varies based on your birth year but generally falls between 55 and 60.
TTR Pension: This is a type of income stream that allows you to draw from your superannuation savings while still employed. You can receive up to 10% of your superannuation balance per financial year.
Superannuation Contributions: You can continue to make contributions to your superannuation even while drawing a TTR pension. This can help in maintaining or growing your superannuation balance.
Benefits of a TTR Strategy
1. Supplementary Income
One of the primary benefits of a TTR strategy is that it provides supplementary income. This can be particularly beneficial if you wish to reduce your working hours but still need to maintain a certain level of income.
2. Tax Efficiency
A TTR strategy can offer significant tax benefits:
Concessional Tax Rates: Income from a TTR pension is taxed at a concessional rate. For individuals over 60, this income is tax-free. For those under 60, the taxable portion is taxed at marginal rates, but with a 15% tax offset.
Reduced Income Tax: By drawing a TTR pension and simultaneously salary sacrificing into superannuation, you can reduce your taxable income, potentially lowering your overall tax liability.
3. Retirement Savings Boost
By salary sacrificing into superannuation while drawing a TTR pension, you can potentially boost your retirement savings. This is because superannuation contributions are taxed at a lower rate (15%) compared to most income tax rates.

How does a TTR strategy impact my superannuation benefits?