Understanding TTR accounts and strategies
A Transition to Retirement (TTR) strategy involves two key components: your regular super account and a TTR account. Whilst continuing to grow your super via your regular super account, you can draw down regular payments (up to 10%) from your TTR account and balance. This approach offers flexibility as you near retirement, allowing you to save more for retirement or reduce work hours while maintaining your income level and topping up your take home pay.
TTR pension features
This is suitable for those who are still working, have reached their preservation age and want to save tax while growing their super or supplement their income by accessing their super savings (up to 10% of the TTR account balance per financial year).
Minimum investment amount |
$20,000 |
Payment frequency |
Twice monthly, monthly, quarterly, half-yearly or yearly. |
Payment amount |
You can choose an income between your minimum and maximum limits. |
Investment options |
There are 11 investment options available, including our Direct Investment option. |
Lump sum withdrawals |
You cannot have partial or full lump sum withdrawals from a TTR account. You can only receive pension payments up to your maximum limit. |
Account closure |
You can roll back your TTR account in to your regular super account at any time. You are not locked in to a TTR account for any defined term. |
How a TTR strategy works
Eligibility
Once you reach your preservation age and are still employed, you can initiate a TTR strategy.
Set-up
You must maintain your existing super account and open a new TTR account.
Contributions
Continue contributing to your super account from your salary and employer contributions.
Transfers
Move a portion of your super to your TTR account, ensuring at least $6,000 remains in it to keep it active.
Withdrawals
You can withdraw up to 10% of your TTR account balance annually to supplement your income.
Investments
Both accounts continue to be invested, potentially growing your retirement savings.
How to set up a TTR account
Before you set up a TTR account, it's a good idea to seek professional advice to see if a TTR strategy is suitable for your specific circumstances. Our Client Service Managers are available for consultations in person, online, or via phone to help craft the ideal plan for your retirement savings. To set up a TTR account:
- Consult an expert: Discuss your retirement goals with an adviser or one of our Client Service Managers. They will help you outline a personalised TTR strategy.
- Understand the detail: Download and thoroughly review our Pension Product Disclosure Statement (PDS). This document contains essential information about the TTR pension product.
- Fill out the application: Complete the Pension membership application found at the end of the Pension PDS. If you're under 60, attach a Tax File Number (TFN) Declaration form obtained from the Australian Taxation Office (ATO) to your application.
- Transfer funds (if applicable): Should you wish to transfer funds from another super fund, complete the legalsuper Request to transfer form. This step consolidates your funds into a single legalsuper superannuation account. Once all transfers are finalised, your legalsuper superannuation account will transition to a legalsuper pension account. More info below.
Fees & costs of a TTR account
legalsuper works hard to keep fees and costs low. Our sole purpose is to maximise the retirement savings of our members. We do not pay commission to agents and are an ‘all profits for members’ fund. Find out more about legalsuper's Transition to Retirement Pension Fees.
How to consolidate your super into a TTR account
- Submit your paperwork with certified ID as detailed on the application form.
- Once your application is accepted by legalsuper, and your account is established, you will receive a summary that shows the details of your pension.
- You will receive your income payments by Electronic Funds Transfer (EFT) to your bank, building society or credit union account, to your nominated schedule.
- Review your strategy regularly.
Pros and cons of a TTR strategy
Tax advantages: For individuals over 60, income payments from the TTR account are generally tax-free.
Flexibility: Use the strategy to work less without sacrificing income or save more by supplementing your salary.
Growth: Continue growing your super savings due to ongoing contributions and investment returns.
Complexity: Setting up and managing a TTR strategy can be complex. It's only suitable for some.
Restrictions: Once a TTR account is established, you cannot contribute further; you can only contribute to your super account.
Tax implications: Understanding the tax implications and making the most of the strategy requires careful planning.
Plan carefully: You should consider your income needs, tax implications, and retirement goals before initiating a TTR strategy.
Need more help? Contact our Client Services team
All Client Service Managers are registered on the Australian Securities and Investment Commission Financial Adviser Register. This register shows where a financial adviser has worked, their qualifications, training, memberships of professional bodies, and what products they can advise on.