‘Transition to Retirement’ can be best described as a measure that allows people who are still working, and who meet the eligibility criteria, to derive income from their superannuation funds whilst they continue to work.

By establishing a ‘Transition to Retirement’ (TTR) strategy you will be able to access a percentage of your superannuation whilst you continue to work.

Setting this up can be confusing, so it is strongly recommended that you contact your financial adviser at Vault Accountants to help you complete this process.

Establishing a TTR creates some interesting investment and income maximisation options for mature age workers and also gives them the potential to more easily move into retirement whilst continuing with your career. You would do well to investigate whether making use of Transition to Retirement can benefit you in your current situation as it could possibly make a huge difference to your financial position and your lifestyle. 

The ‘Transition to Retirement’ measure enables people getting close to retirement to access their accumulated superannuation in the form of a non-commutable income stream. ‘Non-commutable’ simply means that you are unable to withdraw a cash lump sum from your superannuation funds under the measures and a maximum drawing level applies.

The most important thing to consider when setting up a non-commutable income stream is to make sure that the arrangements being made are in compliance with the provisions of the ‘Transition to Retirement’ measures. Pensions specifically set up to comply with the measures are sometimes called ‘Transition to Retirement Account Based Pensions’ (TRABPS) or more accurately ‘Transition to Retirement Income Streams’ (TRIS). TRABPS or TRIS are, as the name suggests, transitional in nature and can therefore eventually be superseded by a more permanent arrangement.

Making use of ‘Transition to Retirement’ by drawing an income stream from your superannuation benefits does not mean that you permanently waive the right to withdraw a cash lump sum from your fund.

Summary of How “Transition to Retirement” Works

If you have reached the age of somewhere between 55 and 60 and you are still working, you can use a TTR strategy to; supplement your income if you reduce your work hours, or boost your super and save on tax while you keep working full time.

You can establish a TTR pension by transferring some of your superannuation money into an account-based pension.

You also need to keep some money in your superannuation account to continue to receive your employer’s compulsory contributions or any voluntary contributions you make into your superannuation account.

Starting a TTR pension may impact you or your partner’s government benefits. It is therefore important to speak to a Services Australia Financial Information Service (FIS) officer to receive more information.

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

You Can Also Use TTR To Reduce Your 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 percent 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 will 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 to top up your super as you approach retirement.
  • Save tax — You pay 15 percent 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 percent tax offset.


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