Transition to retirement

Reducing your working hours without reducing your income

‘Transition to retirement’ is a strategy that enables you to boost your superannuation savings or reduce the number of hours you work, while still maintaining your standard of living.

This strategy can be implement once you reach the age at which you are able to access your superannuation benefits (55 or over – depending on the year you were born). It allows you to increase your superannuation savings with pre-tax dollars through salary sacrifice deductions, while at the same time topping-up your income by converting a portion of your superannuation to a to ‘non-commutable’ income stream.

However, while the strategy has certain advantages, it is also complex and needs to be carefully considered and implemented.

Your Markiewicz & Co. adviser can help you determine whether transition to retirement is appropriate for your circumstances, and help ensure that you achieve the right balance between the income you draw from your superannuation, and the amount of salary you are sacrificing.

How a transition to retirement strategy can benefit you

Here’s an example of how a transition to retirement strategy can help you boost your superannuation holdings without compromising your current standard of living.

Scott is 55 years old, earns $100,000 a year and has $500,000 in his superannuation account, He decides to ‘sacrifice’ $50,000 of his income to his super fund and commence a ‘non-commutable’ account-based pension, and re-allocating any surplus back to his superannuation account. By doing this, Scott is able to increase his overall superannuation savings by x% each year, without compromising his current standard of living:


Net income each year

Superannuation account balance after 10 years

If Scott retains the status-quo and continues to earn $100,000 and only contribute the Super Guarantee





Salary sacrifice $50K (including Super Guarantee), and start a ‘non-commutable’ account-based pension fund, re-allocating any surplus back to super.






  • Tax rates applicable to Australian resident for 2008/09, including Medicare levy
  • Scott has private health insurance
  • Investment return of 7% before fees and taxes
  • Salary increases at 3% per annum
  • The non-commutable account-based pension drawing remain the same each year

Is transition to retirement suited to your needs?

If you are aged 55 or more and would like to boost your superannuation, or start working less, talk to a Markiewicz & Co. advisor about the suitability of a transition to retirement strategy. Call us on 1300 276 112 or send an email.

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