Deciding when to retire is a significant life decision, and it becomes even more challenging when concerns about retirement income come into play. While the average age of Australia’s 4.2 million retirees is 56.9 years, many people choose to work longer, with most intending to retire at just over 65 years.i
“Retirement isn’t just about stopping work—it’s about ensuring you have the financial confidence to enjoy this next stage of life,” says Daniel Grusd, Director & Senior Financial Adviser at Onelife Financial. “A well-planned transition can make all the difference in maintaining both your lifestyle and long-term financial security.”
Considering a Transition to Retirement Strategy (TTR)
If you’re not quite ready to retire, a ‘transition to retirement’ (TTR) strategy might work for you. It allows you to ease into retirement by:
- Supplementing your income if you reduce your work hours, or
- Boosting your super while still working full-time and potentially saving on tax.
With a TTR strategy, individuals aged 60 and over can start drawing an income stream from their super without fully retiring.
Working Less Without Reducing Your Income
A TTR strategy involves moving part of your super into a special super fund account that provides an income stream. You can withdraw up to 10% of your balance each year while continuing to earn a salary and contribute to your super.
For example, Alisha, 60, reduces her work to three days a week, lowering her salary from $50,000 to $30,000. She transfers $155,000 of her super to a TTR pension and withdraws $9,000 tax-free annually to replace some of her lost income.
While income from your super fund under a TTR strategy is tax-free, it’s important to consider potential impacts on any government benefits you or your partner receive. You should also check how a TTR strategy affects any life insurance within your super fund.
Using TTR to Boost Your Super
If you plan to keep working full-time beyond age 60, a TTR strategy can help you increase your super balance while potentially reducing your taxable income.
For example, Kyle, 60, earns $100,000 a year and intends to work for at least another five years. He transfers $200,000 from his super into an account-based pension and starts a TTR strategy. He then salary sacrifices additional funds into his super while withdrawing up to 10% of his TTR pension balance each year to maintain his take-home pay.iii
A TTR strategy is often most effective for those with a larger super balance, a higher marginal tax rate, and unused concessional contribution caps. However, it can also be beneficial for those on lower incomes, though the benefits may be smaller.
“Building a future you can enjoy starts with understanding your options today,” says Daniel. “A structured retirement strategy allows you to make the most of your super while maintaining financial security and flexibility.”
Is a TTR Strategy Right for You?
TTR won’t suit everyone, so it’s important to weigh the pros and cons:
✅ You can withdraw up to 10% of your super balance each year.
❌ Starting withdrawals early may mean you have less super later in retirement.
✅ You may reduce your taxable income and grow your super balance.
❌ If your employment situation changes, the rules around TTR can be complex.
Navigating retirement planning can be overwhelming, but you don’t have to do it alone. The Onelife Financial team is here to help you create a tailored retirement strategy that aligns with your goals, giving you confidence for the future.
📅 Let’s build your future together—speak with us here.
i Retirement and Retirement Intentions, Australia, 2022-23 financial year | Australian Bureau of Statistics
ii, iii Transition to retirement – Moneysmart.gov.au
