I am 61 years old and I work part time. I am already paying the maximum super contributions allowed for salary sacrifice. Is there an advantage for me to benefit from a retirement transition scheme through my super? I don’t need extra income from super.

Thank you for your question. I see no benefit to you starting a Transition to Retirement (TTR) pension given the circumstances you briefly describe here.

The tax applied to income from retirement transition pensions is identical to that applied in your current accumulation phase. Originally, TTR pensions enjoyed the same generous tax treatment as account-based pensions (0 per cent tax on income and capital gains up to the transfer balance cap), making them a much more interesting proposition.

Today, however, unless you can use the compulsory pension that must be drawn from your savings productively, usually by paying salary sacrifice contributions back into a superannuation, you will get no benefit from it.

This is because the TTR pension would see your retirement savings depleted due to having to take pension withdrawals, which would then reduce the amount you could ultimately receive in a tax-free pension in retirement. In these circumstances, a TTR pension has made your situation worse.

Paul Benson is a Certified Financial Planner at Financial Guidance Services. He welcomes the What is possible? And Financial autonomy podcasts. Questions to: [email protected]

• The advice given in this article is general in nature and is not intended to influence readers’ decisions regarding investment or financial products. They should always seek advice from a professional who takes their personal circumstances into account before making financial decisions.

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