3 Reasons A Transition-to-Retirement Strategy Can Work For You
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6 Reasons A Transition-to-Retirement Strategy Is For You

3 Reasons A Transition-to-Retirement Strategy Can Work For You

Have you ever heard of a Transition-To-Retirement strategy or TTR? Depending on your situation, and done with the assistance of an experienced financial adviser, it can be a beneficial strategy to implement in the latter part of your career as you approach retirement. Read on to learn if a TTR strategy is for you.

Transition-to-Retirement Strategy

What is a TTR?

Those who don’t want to completely quit the workforce, have reached their preservation age, are still working, and who have an eligible superannuation account could apply to set up a TTR pension. You can withdraw up to 10% of your super balance each financial year – whether you’re still working full-time, part-time or casually. A TTR pension doesn’t allow you to withdraw your super as a lump sum, it must be withdrawn as an income stream. Once you reach age 65 or advise your super fund that you’ve retired permanently, your TTR pension will automatically convert to an account-based pension.

Learn more about the ATO’s TTR rules here.1

3 Benefits of a Transition to Retirement Strategy

1. Potential Tax Savings

You can utilise a TTR to grow your super balance and pay less tax as you approach your retirement.

  • Boost your super: combine a TTR with salary sacrificing to top up your super.
  • Save tax: you pay 15% tax on salary sacrificed contributions, which is likely to be lower than your marginal tax rate.
  • Pay less tax on income: your TTR pension payments are tax-free if you are age 60 or older. If you are 55 to 59 you are taxed at your marginal tax rate, but you get a 15% tax offset.

2. Ease Into Retirement

For some, the idea of retiring can be a daunting or unpleasant concept as work provides a sense of purpose as well as the ability to socialise regularly.  A TTR pension could allow a more gentle transition into retirement, allowing a person to remain in the same job and gradually reduce their work hours while having the finances to maintain their lifestyle.

3. You Gain Access to Your Super Early

When you start your TTR, you can access your super early on. This means that you can use your super’s income to help you. You might find that you are in a situation where you need some help financially but don’t have the means to get to where you want to be. The extra funds can help you make the necessary investments you might need for the change. Alternatively, you can use your super to pay off your mortgage and other debts and then use your TTR to live a more comfortable life.

Questions to Ask Before Commencing a TTR

  • Does my super fund accommodate a TTR pension (some don’t)?
  • How much income would I ideally need in this phase of my life?
  • Will this income impact any government entitlements I can receive?
  • Will the life insurance cover I hold via my super fund be affected?
  • Am I happy to keep working or should I retire completely?
  • Do I have a sufficient super balance for my retirement if I start a TTR now?

Is a TTR for You?

A TTR strategy can give you the flexibility to live a comfortable life. That said, understand that TTR isn’t for everyone. You need to consider your situation thoughtfully and consult with an experienced retirement financial adviser on this topic – let them advise you on the best course of action to retire to a comfortable life!

Coastal Advice Port Macquarie offers professional financial advice to help individuals from young professionals to retirees plan their retirement effectively. Our ultimate aim is to help you achieve all your goals for retirement so you can live your best life without having to stress about your financial situation.

Call us or book online to secure your complimentary first meeting.



  1. https://www.ato.gov.au/Individuals/Jobs-and-employment-types/Working-as-an-employee/Leaving-the-workforce/Transition-to-retirement/


DISCLAIMER: The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice Group’s position and are not to be attributed to RI Advice Group. They cannot be reproduced in any form without the express written consent of the author. This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice. Newcastle Financial Planning Group, Central Coast Financial Planning Group, Sydney Wealth Advisers, Coastal Advice Port Macquarie and Coastal Advice Ballina Byron are subsidiaries of Coastal Advice Group Pty Ltd which is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.
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