Transition to retirement income streams and reducing work hours

It is a common misconception that to access a transition to retirement income stream, you need to reduce working hours. Although this can be a viable strategy, it isn’t a necessity.

Transition to retirement income streams can be a valuable way to do a range of things in the lead up to retirement provided you meet the criteria to set one up and it is actually beneficial in your circumstances to do so. Ways to use a transition to retirement income stream can include:

· Assisting in debt reduction.

· Helping to cover the costs of renovations (like installing solar panels to reduce electricity costs in retirement).

· Helping to fund your cash flow to maximise the amount of tax affective contributions to super you can make.

· Or you can use them “traditionally” i.e. reducing 2 days a week work then “topping up” the lost income with funds from your transition to retirement income stream.

You generally can only access a maximum of 10% each financial year (and a minimum of 4%). Depending on which fund you are with though you may be able to take your requested payment spread out on a fortnightly or monthly basis or even as a once off annual amount.