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Tuesday, 26 October 2021 08:10


A 'transition to retirement' (TTR) strategy lets you access some of your super and keep working.

For personalised information on your options when it comes to retirement, take a look at our Financial Planning options. 

How transition to retirement works

If you've reached your preservation age (between 55 and 60) and still working, you can use a TTR strategy to:

Starting a TTR pension

You can start a TTR pension by transferring some of your super to an account-based pension.

You need to keep some money in your super account to continue to receive your employer’s compulsory contributions. Or any voluntary contributions you make.

Government benefits and TTR

Starting a TTR pension may impact your or your partner's government benefits. Speak to a Services Australia Financial Information Service (FIS) officer for more information.

Life insurance and TTR

You may have life insurance with your super. Check if your cover reduces or stops if you start a TTR pension.

Using TTR to reduce work hours

If you want to reduce your work hours, a TTR strategy can top up your income.


Continue to receive super contributions — This helps to replace the money you take out.

Pay less tax — If you are 60 or older, your TTR pension payments are tax free. If you are 55 to 59, your pension is taxed at your marginal tax rate, but you get a 15% tax offset.

Ease into retirement — You can start planning what you'll do with your leisure time before you retire completely.


Affects retirement income — If you start drawing down your super early, you'll have less money when you retire.

Using TTR to save on tax

You can use a TTR pension to grow your super and pay less tax in the lead up to retirement.

This strategy works best if you are 60 or older and a mid to upper income earner.


Boost your super — A TTR pension can be used with salary sacrificing to top up your super as you approach retirement.

Save tax — You pay 15% tax on salary sacrificed contributions. This is likely to be lower than your marginal tax rate.

Pay less tax on income — If you are age 60 or older, your TTR pension payments are tax free. If you are 55 to 59 you are taxed at your marginal tax rate, but you get a 15% tax offset.


Complexity — You may need to pay for financial advice to understand if this strategy is for you.

This article was originally published by Moneysmart at This information is general in nature. does not take into account your personal situation and does not constitute financial advice. Please refer to any relevant terms and conditions associated with any financial product offering.