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Transition to retirement

Access your super while you keep working

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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 transition to retirement works

If you're aged 55 to 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.

Pros

Cons

Woman sitting on a stool, looking serious.

Alisha reduces her work hours

Alisha has just turned 60 and currently earns $50,000 a year before tax. She decides to ease into retirement by reducing her work to three days a week. This means her income will drop to $30,000. Alisha transfers $155,000 of her super to a transition to retirement pension and withdraws $9,000 each year, tax-free. This replaces some of her lost pay.

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.

Pros

Cons

Man standing drinking coffee.

Kyle reduces his tax

Kyle is 60 and earns $100,000 a year. He intends to keep working full-time for at least another five years. Kyle transfers $200,000 from his super to an account-based pension so he can start a TTR strategy.

He salary sacrifices into his super. This will reduce his income tax, but also his take-home pay. He tops up his income by withdrawing up to 10% of his TTR pension balance each year.

Plan your retirement

You may benefit from combining a mix of income options when you retire.