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In 2005, former Treasurer Peter Costello implemented the mother of baby boomer bribes in the form of the “transition-to-retirement” (TTR) rules, which allowed those aged over 55 to legally minimise their tax by salary sacrificing up to $35,000 into a superannuation account and then simultaneously withdrawing the funds as income. In turn, TTR effectively allowed high income earners to reduce their marginal tax rate from 45% to 15% on the last $35,000 of their income.
I have often described transition-to-retirement pensions (TRIPs) as the super saver’s version of ‘having your cake and eating it’.
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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.