This guide explains general concepts for educational purposes. It is not financial, tax or legal advice, or a recommendation to buy, sell, hold or change a financial product or strategy. It does not take into account your objectives, financial situation or needs. Rules, caps, thresholds and product terms can change. Check the current official information and obtain advice appropriate to your circumstances before making a financial decision.
How a TTR pension works
A transition-to-retirement income stream may be available after reaching preservation age while continuing to work. It pays an income from super subject to minimum and maximum payment rules.
Why it may be considered
A TTR strategy may help supplement reduced working hours or operate alongside salary-sacrifice contributions. The tax and superannuation outcome depends on age, income, contribution capacity and current law.
It is not automatically beneficial
Drawing from super reduces the amount remaining invested. Fees, tax, cash flow and the effect on retirement savings should be modelled before proceeding.
A bridge between work and retirement
A transition-to-retirement income stream allows eligible people to draw income from super while continuing to work. It can be used to support reduced working hours or form part of a broader contribution and income strategy. The effect depends on earnings, contributions, withdrawals and the applicable tax treatment.
It is not the same as unrestricted access to all super savings. Payment limits and restrictions apply while the account remains in the transition-to-retirement phase. The account's status can change when a relevant condition is met.
Two accounts with different jobs
An accumulation account can continue to receive employer and other eligible contributions while the income stream makes payments. The pension payment reduces the amount remaining in the income account; it is not an additional investment return. Contributions and withdrawals therefore need to be considered together to understand the net effect on savings.
The arrangement can also affect insurance held through super and account administration. A projection separates after-tax employment income, contributions and pension payments, rather than assuming that starting the pension necessarily improves the outcome. The rules for retirement-phase pensions and transition-to-retirement accounts are not identical.