PRE-RETIREMENT STRATEGY
Transition to retirement: how a TTR income stream works
A transition-to-retirement income stream can provide payments from super while you keep working, subject to eligibility and payment rules. This guide outlines the questions about reduced hours, contributions, fees and tax. Pension Pilot does not calculate TTR benefits.
TTR CAPABILITY AND TAX WORDING UPDATED 6 OCTOBER 2026; GENERAL GUIDE ONLY
The rules, in order.
Read the current Moneysmart TTR guide and retirement income and tax guide. Fund and individual circumstances can change the treatment.
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 | For a full year before age 65, normally 4% of the relevant balance. In the first year, use the commencement balance and applicable pro-rating or 1 June exception. Confirm the required amount with your fund. |
| 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+) | Generally tax-free for payments from a taxed fund after age 60; untaxed funds and some benefits have different treatment. Check with your fund. |
| 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 | Moves into retirement phase at age 65, or when you notify the fund that you meet a relevant full condition of release. Confirm the process and applicable limits with your fund. |
Source: ATO — transition to retirement.
The two common ways people use it.
Reduce hours, keep the same income: TTR payments may supplement reduced wages. Drawing on super reduces retirement savings; the amount available depends on payment limits and your account.
Salary-sacrifice and TTR together: Some people use salary sacrifice alongside TTR payments. Contribution caps, contributions tax, income tax, fees and the effect on future super must all be considered. A benefit is not assured, and Pension Pilot does not calculate that after-tax comparison.
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. This illustrates withdrawal arithmetic only. It does not calculate income tax, salary sacrifice, fees or his future balance, and does not establish that his take-home pay is maintained. It is a fictional example, not a Pension Pilot TTR calculation.
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.
This guide explains transition-to-retirement concepts. Pension Pilot does not calculate TTR restrictions or the after-tax benefit of salary sacrifice. Its ordinary super-withdrawal inputs are not a TTR strategy calculator. Ask your super fund and a licensed financial adviser to assess a TTR strategy for your circumstances.