Reasons consider starting a TTR
Boost your super
Boost your income
Be tax smart
and keep the
same pay
Switch to
part-time
work
Save more
now so you
have more in
retirement
Access
additional
income
TTR Income stream payments
TTR income stream payments
You must receive a payment at least once each financial year
Minimum amount based on age must be paid from your income
stream each financial year. (Under 65 = 4% p.a.)
Maximum payment amount is 10% per financial year
Generally no lump sum withdrawals
Taxation (Earnings)
TTR Income
Stream
Individual
Accumulation
phase
Tax of up to
Taxed up to
Taxed up to
49%1
15%
0% (now)
15% (from July 2017)
1 Medicare Levy of 2% and the temporary budget repair levy of an additional 2% for taxable incomes above $180,000 has been included.
Taxation (Income stream payments)
TTR Income
Stream
Payments 56-59
Tax free portion is tax free.
Taxable portion is taxed at
your marginal tax rate but
a 15% tax offset is available.
Taxed up to
0% (now)
15% (from July 2017)
Taxation (Income stream payments)
TTR Income
Stream
Payments 56-59
Tax free portion is tax free.
Taxable portion is taxed at
your marginal tax rate but
a 15% tax offset is available.
Payments 60+
100% Tax free
How does a TTR strategy work?
Salary sacrifice
Gross income
Super
account
Contributions
(15%)
Employer
contributions
Marginal
income tax
rate
Take home
pay
This diagram is provided for illustrative purposes only.
Transfer
funds
Income stream payments
Income
stream
account
Mary – boost your super example
Objectives
Boost super
Retain current lifestyle
(same take home pay)
Works full-time for
the government
and earns
$80,000 p.a.
Current super
balance of
$200,000
Salary sacrificing
standard member
contributions of 5%
Employer
contributions
of 12.75%
Mary – boost your super example
Maximise salary
sacrifice contributions
Super
Work full-time
Income stream payments
Take home pay
TTR income stream
Mary – boost your super (income position)
Income position
Before-tax salary
TTR income stream income
Less salary sacrifice contributions
Without
strategy
Age 59
TTR
$80,000
$0
Age 60+
TTR
$80,000
(Taxable)
$16,924
$80,000
(Tax Free)
$13,452
$4,000
$24,800
$24,800
Taxable income
$76,000
$72,124
$55,200
Less income tax (2016/2017 FY)1
$17,767
$16,429
$10,419
$0
$2,538
$0
$17,767
$13,891
$10,419
$2,130
$5,250
$5,250
$19,897
$19,141
$15,669
Less tax
$58,233
$58,233
$58,233
Same pay
15% income stream offset
Less income tax total
Less contributions tax 15%2
Total tax
Take home pay
Outcome – Mary maximises her tax position and retains the same level of take home pay
Some amounts have been rounded for illustrative purposes. 1 Includes Medicare Levy 2% and Low Income Tax Offset for the 2016/2017
financial year and assumes that the income stream income is 100% taxable for someone under age 60. 2 Charged on entry to the fund and
doesn’t impact on take home pay amount. Includes employer contributions of 12.75%.
Mary – boost your super (super position)
Source of super income
Salary sacrifice contributions
Current
Age 59 TTR
Age 60+ TTR
$4,000
$24,800
$24,800
$10,200
$10,200
$10,200
Less contributions tax (15%)
$2,130
$5,250
$5,250
Less TTR income payments
$0
$16,924
$13,452
$12,070
$12,826
$16,298
Employer contributions*
Net flow to super
How much more into super?
(in the first year when compared to the current scenario)
<6
* Employer contributions of 12.75% or $10,200 p.a. before tax.
<60
$756
60+ $4,228
Mary – boost your super (super position)
$392,971
450,000
$367,898
400,000
350,000
Value ($)
300,000
250,000
200,000
150,000
100,000
Current strategy
50,000
TTR strategy
0
60
61
62
63
64
65
66
Assumptions: Investment returns are based on earning 6.5% p.a. and an average tax rate of 15% on super fund earnings. Maximum
concessional contribution limit is $25,000 p.a. CPI is assumed at 2.0%, Medicare Levy 2% and AWOTE 3%. Income tax rates are based on
the 2016/17 financial year.
Transition to retirement easily with QSuper
QSuper’s Income account with TTR
strategy
Minimum $30,000 to
open
Can transfer funds from either a
Defined Benefit or Accumulation
account
Flexible payment
frequencies
Automatically standard QSuper
income account at age 65
Investment choice
Is a TTR strategy right for you?
Achieve an outcome
that suits you.
Does this strategy
suit your situation?
Will you have
enough to retire?
Aged 55 to 59 –
tax benefits may
be minimal
Defined Benefit
account
certainty
Contribution
limits