Using a TTR to build wealth

A TTR allows you to build your super wealth while receiving tax benefits.  

Case study - Adam builds his super savings

Adam is 60 and wants to increase his super savings of $450,000, but without contributing extra money directly into his account. Adam's current take home pay is $69,563 per year.

How Adam can use a TTR income stream to increase his super contributions

A TTR income stream lets Adam increase the amount he contributes to super without changing his take home salary, by reducing the amount of tax he pays and replacing any 'lost' income with payments from his TTR income stream.

Adam Age 60
Without TTR strategy

Adam Age 60
With TTR strategy
Total take-home salary

$69,563
(take home salary)

$69,563
(take home salary + income stream)
Total tax paid* $21,787 $18,215
Total super contributions $7,650 $23,222
Total increase to super balance in first year†  $7,650 $11,222

By using a TTR strategy to increase his super contributions, Adam could end up with an extra $19,594 in retirement savings and save $15,877 in tax over 5 years.

Adam aged 65 without TTR income stream Adam aged 65 with TTR income stream

Super balance: $681,971

 Super balance: $701,565
 Income tax + contribution tax $156,005  Income tax + contribution tax $140,128

Assumptions:

  • Adam earns a salary of $90,000 p.a. (excluding Super), which is indexed in line with CPI of 3.2%
  • Adam's current super and TTR income stream account earns a net return of 6% per annum
  • Calculations are based on current tax rates.  
  • The amounts shown are in future dollars
  • SG contributions are assumed to increase in line with legislated increases 
  • Concessional contributions made by Adam are assumed to increase in line with legislated increases up to Adam's contributions cap.
  • Adam will adjust his TTR withdrawals every financial year to maintain same net take home pay.

* This amount is equal to Adam's income tax, plus Medicare levy, plus contributions tax payable.
† This amount is equal to Adam's total super contributions (employer contributions, plus salary sacrifice, plus post-tax contributions, less contributions tax) minus his income stream payments.

 

Need help setting up a TTR strategy?

TelstraSuper Financial Planning can provide you with general and simple personal advice over the phone about your TelstraSuper account and your retirement planning options. There's no additional cost for our phone based advice as this is included in your TelstraSuper membership.  Call us on 1300 033 166.

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