Transition to Retirement Pension Explained

By GrowThenDraw Editorial Team · Updated August 2, 2026 · 8 min read · Editorial policy

A transition-to-retirement strategy can provide regular super income after preservation age while a person keeps working. It is sometimes paired with salary sacrifice, but the cash flow, contribution caps, fees and tax outcome must be considered together.

Minimum and maximum payments

A TTR income stream must pay at least the account-based pension minimum for the person's age and generally no more than 10% of the account balance in a financial year. It does not normally permit unrestricted lump-sum withdrawals.

Tax treatment

For most people aged 60 or over receiving payments from a taxed fund, pension payments are generally tax-free. Below 60, the taxable component is generally included at marginal rates with a 15% tax offset. Untaxed funds and defined benefits can differ.

Investment earnings in a TTR account that is not yet in retirement phase are generally taxed within super rather than receiving the retirement-phase earnings exemption.

Keep an accumulation account open

Employer and voluntary contributions cannot normally be added to an existing pension account. A person usually leaves money in accumulation to receive new contributions, then may later consolidate or start another pension subject to fund rules.

When TTR becomes retirement phase

A TTR income stream can enter retirement phase when an unrestricted condition is met, such as retirement, permanent incapacity or age 65. The fund should be told when relevant facts change.