Checklist on TTR
1. Make sure you can salary sacrifice
Check with you employer whether you can salary sacrifice your income into superannuation. Some employers won’t allow it or will limit the amount employees can salary sacrifice into super. Additionally, ensure any salary sacrifice arrangement does not affect the level of super contributions your employer is currently paying on your behalf.
2. Determine how much you need
Do your sums to determine how much income you need to (a) salary sacrifice and (b) draw down from your super to maintain your take-home pay or a reasonable pay level.
3. Check whether you have enough super
Check whether you have the funds required to draw the required income. Remember a TTR pension only allows a maximum of 10% of your superannuation balance to be drawn each year.
4. Protect your income
Your income is your number one asset and should be protected by income protection insurance. Otherwise if you fall sick or become injured due to an accident and lose your job, your TTR strategy could fall over.
5. Reassess the numbers at 60
Once you turn 60, you will probably need to redo your sums as income from a TTR pension becomes tax free. That means you might need to draw less from your superannuation to maintain your pay than in previous years (from 55 to 59 you receive tax concessions rather than a full tax exemption).
