Transition-to-retirement income streams
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To access their superannuation, an individual needs to meet a condition of release. One of the conditions of release is attaining preservation age, which entitles a person to access their superannuation in the form of an income stream, with a restriction that a maximum of up to 10% of the balance can be accessed as pension payments.

Such income streams are commonly referred to as transition-to-retirement income streams (TRIS). They have been a powerful structure in financial planning since their advent in July 2005. However, with progressive reduction of the concessional contributions cap since 1 July 2007 and with the removal of earnings tax exemption on TRIS from 1 July 2017, many have questioned whether TRIS continue to have merit in financial planning.

This paper outlines some of the common applications of TRIS and highlights that TRIS can continue to add strategic value.

What is a TRIS?

A TRIS at its simplest form is an income stream that consists of preserved funds in part or in full. While one can be commenced when an individual reaches their preservation age, their TRIS is still preserved unless they meet another condition of release, typically retirement, which entitles them for a full release of their superannuation benefits, including commencing an unrestricted account-based pension or purchasing a lifetime annuity.

Preservation age

Preservation age depends on a person's date of birth and is gradually increasing to 60 for those born on or after 1 July 1964. People born before 30 June 1962 have already reached their preservation age when they turned age 57.

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