Help could be at hand in both cases in the form of a superannuation transition-to-retirement pension (TTR). This strategy can be used to either:

• Work fewer hours and use a TTR pension from your super to supplement your income.
• Salary sacrifice some of your salary into super to save tax and withdraw income from your super using a TTR pension to replace some or all the lost income, even if you continue working full time.

• From 1 July 2017, the investments underlying a TTR pension are taxed at up to 15% just as they are in a super accumulation account – previously they were tax free. However, these earnings are still exempt if you are over 65.
• What has not changed is the taxation of TTR pension income. If you are 60 or older, in most cases your pension payments will be tax free. If you are younger than 60, then the taxable portion of your pension income will be taxed at your marginal tax rate, less a 15% tax offset.

Depending on your personal circumstances, TTR pensions have much to offer. They can help you:

• Ease into retirement by reducing your working hours without cutting your income or compromising your lifestyle.
• Continue to make contributions to your super accumulation account (or have them made by your employer).
• Receive tax-free pension payments (but only if you are aged over 60).
• Grow your super and save tax via salary sacrifice or voluntary contribution, even if you continue working full time.