If you currently hold a Transition to Retirement (TTR) pension and will turn 65 before 1 July 2026, your timing may significantly affect your future Transfer Balance Cap.
Why This Matters:
At age 65, a TTR pension automatically converts to retirement phase, creating your initial Personal TBC.
Potential Problem:
If this happens before 1 July 2026:
- Your initial cap may default to $2 million
- You may lose access to full $2.1 million starting cap
- Future proportional indexation may be reduced
Potential Strategy:
Some individuals may benefit from:
- Commuting TTR back to accumulation before age 65
- Restarting account-based pension after 1 July 2026
Important:
This strategy involves weighing:
- Temporary tax costs
- Delayed retirement-phase earnings exemptions
- Future cap advantages
Unsure How the 2026 Transfer Balance Cap Changes May Affect You?
Small timing decisions around your TTR pension and retirement-phase income streams could have long-term tax and superannuation consequences.
At Forman Financial Services, we help clients understand their options and develop strategies tailored to their retirement goals.
Contact us here to discuss your superannuation and retirement planning strategy.
Disclaimer and Warning
The information above is of a general nature only. It should not be used as a source to make financial decisions. It’s also important to note that the legislation and figures related to this topic tend to change regularly and therefore the information above may not reflect the current status. We recommend that if you are looking for advice on this matter, you should contact us.