Quick Look
Focus: How to use your super to supplement income and boost retirement savings before fully retiring
Key Takeaways:
Not quite ready to retire — but want to cut back on work? That’s where a Transition to Retirement (TTR) strategy can help.
A TTR strategy allows you to access part of your super while still working. It’s designed for people who’ve reached their preservation age (between 55 and 60 depending on your birth year), and want more flexibility in how and when they retire.
Used correctly, TTR can help you supplement income, reduce tax, or grow your super in the years leading up to retirement.
As more Australians aim for a gradual or flexible retirement, many want to reduce their work hours without compromising their lifestyle — or their super growth.
A TTR strategy allows you to:
But the rules are specific, and the benefits depend on your income, tax rate, and super balance. If misunderstood or poorly managed, a TTR pension can erode your super faster than planned.
A TTR (Transition to Retirement) pension is a type of income stream you can start once you reach your preservation age and are still working.
Birth Year Preservation Age
Before 1 July 1960, 55 - 1960–1964, 56–59 (increases by year) - From 1 July 1964, 60
A TTR pension has both:
This is where the real strategy comes in. A common approach is:
Example:
Karen, age 60, earns $90,000 and salary sacrifices $18,200 into super.
Tip: The concessional contributions cap is $30,000 per year (2025–26). This includes SG + salary sacrifice + personal deductible contributions.
If you want to cut back hours:
This allows you to ease into retirement gradually, without a sudden income drop.
Once you’ve met a full condition of release (e.g. retirement after age 60 or turning 65), you can:
Why do this? To reduce the taxable component of your super, which may lower the tax your adult children pay if they inherit it.
Important points:
Sam’s TTR Success Sam, 61, earns $100,000 and wants to retire at 65. He sets up a TTR pension with $250,000 from his super and draws $15,000 per year. He salary sacrifices $20,000 of his salary into super and uses the TTR payments to maintain his take-home pay.
Over 4 years: He boosts his super by nearly $50,000 (net of tax and drawdowns) Pays around $6,000 less in tax Retires with more super and a smoother financial transition
Is a TTR pension tax-free?
Only after age 60 are TTR income payments tax-free. Before age 60, payments are taxed at your marginal rate (with a 15% tax offset). Earnings inside the TTR account are still taxed at 15%, unlike full retirement pensions.
Can I start a TTR if I haven’t retired?
Yes — that’s the point. Once you reach preservation age, you can start a TTR income stream without fully retiring.
Can I access lump sums in TTR phase?
No. TTR income streams are non-commutable — meaning you can’t take lump sums unless you meet a full condition of release (e.g. retirement or turning 65).
Will a TTR reduce my super balance?
Not necessarily — it depends on how much you withdraw versus how much you contribute. A well-planned TTR strategy can actually increase your net super balance.
Is a recontribution strategy always worth it?
Only if your super has a large taxable component and your beneficiaries are non-dependants (e.g. adult children). Otherwise, it may not change your tax outcome.
Transition to Retirement strategies can be powerful when used well — whether you’re aiming to reduce tax, ease into part-time work, or grow your super faster before stopping work entirely.
But they’re not set-and-forget. Make sure your strategy fits your age, tax position, income, and retirement goals. Done properly, it’s one of the most flexible ways to make your final working years really count.
Getting ready to retire?
moneyGPS helps you set up a regular income stream using your super, tailored to your retirement plans.
Available online for $220. You can explore the platform for free and access the advice when you’re ready.
Need Full Scope Financial Planning?
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Disclosure: General information only. Consider your objectives, financial situation and needs, and seek professional advice before acting.
Disclaimer: All information on Super Advice Ai is general in nature only and does not take into account your personal objectives, financial situation or needs. You should consider whether any information on Super Advice Ai is appropriate to you before acting on it. If Super Advice Ai refers to a financial product, you should obtain the relevant Product Disclosure Statement (PDS) or seek professional advice from a licensed financial planner.
