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’.
