Transition To Retirement Strategies (TTR)

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

Setting this up can be complicated, so contact your super fund or financial adviser for advice.

How to 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:

a. supplement your income if you reduce your work hours, or
b. boost your super and save on tax while you keep working full-time.
c. Starting a TTR pension
d. 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.

Pros

a. Continue to receive super contributions – This helps to replace the money you take out.
b. Payless 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.
c. Ease into retirement – You can start planning what you’ll do with your leisure time before you retire completely.

Cons

a. Affects retirement income – If you start drawing down your super early, you’ll have less money when you retire.

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