PRE-RETIREMENT STRATEGY
Transition to Retirement (TTR): how it works from 60 onward
Still working but eligible to draw an income stream from super — a TTR pension can top up your income, let you cut hours without cutting pay, or simply move part of your balance into a lower-tax pension environment while you’re still earning.
OFFICIAL RULES CHECKED 22 AUGUST 2026
The rules, in order.
A Transition to Retirement Income Stream (TRIS) lets you draw an income from your super while still working, once you’ve reached your preservation age — 60 for everyone now that the phase-in period has ended. It’s an income stream, not a lump sum withdrawal, and it comes with specific limits.
| Rule | Detail |
|---|---|
| Minimum starting age | 60 (preservation age) |
| Minimum annual drawdown | 4% of the 1 July account balance |
| Maximum annual drawdown | 10% of the 1 July account balance — you can’t take more, unlike a full retirement pension |
| Tax on payments (under 60) | Not applicable — TRIS can’t start before 60 |
| Tax on payments (60+) | Tax-free in your hands |
| Tax on fund earnings | Up to 15% — earnings supporting a TTR pension are NOT tax-free, unlike a retirement-phase pension |
| What happens at 65 or full retirement | Automatically converts to a standard retirement-phase account-based pension |
Source: ATO — transition to retirement.
The two common ways people use it.
Reduce hours, keep the same income: drop to part-time work and use TTR payments to fill the income gap, while still adding new super contributions from the work you keep doing.
Salary-sacrifice and TTR together: keep working full-time, salary-sacrifice more into super (taxed at 15% going in), and draw a TTR pension to replace the take-home pay you sacrificed — a legal way to reduce tax while your balance keeps growing. This only works well if the tax saved outweighs the 15% earnings tax the TTR account still pays, so it needs real numbers, not a rule of thumb.
Worked example
David, 62, earns $110,000 and has $420,000 in super. He drops to four days a week, cutting his salary to $88,000, and starts a TTR pension drawing 6% a year ($25,200) to make up the difference. He also increases his salary sacrifice, which reduces his taxable income further — the combination keeps his take-home pay close to what it was on five days, while gradually shifting toward retirement.
Frequently asked questions
Can I stop a TTR pension once I start it?
You can commute it back to accumulation phase, but you can’t simply skip the minimum annual drawdown while it’s running.
Does a TTR pension count toward the transfer balance cap?
No — only retirement-phase pensions (after you meet a full condition of release) count toward the transfer balance cap.
Is a TTR strategy worth it for everyone?
No. It mainly helps people on higher marginal tax rates who can salary-sacrifice meaningfully, or those who genuinely want to reduce hours without a pay cut — it’s not automatically a win for lower incomes.
Can I access TTR money as a lump sum?
Generally no, while it remains a transition to retirement income stream — lump sum access requires meeting a full condition of release, such as retiring or turning 65.
Apply this to your own plan.
Pension Pilot’s calculator can model a TTR drawdown alongside reduced work income and salary sacrifice in your full retirement report, so you can see whether the strategy actually pays off for your numbers. These figures are educational and should be checked against official ATO sources and, ideally, a licensed financial adviser before you act.