Transition to Retirement: A Plain-English Guide
Last updated 14 April 2026 · General information only
A transition-to-retirement (TTR) income stream lets you access some super once you reach preservation age, even if you are still working. It is a useful tool for some people and unnecessary for others.
How a TTR works
You move part of your super into a TTR income stream and draw an income from it, within an annual minimum and maximum. Unlike a full retirement-phase pension, there is a cap on how much you can withdraw each year and lump sums are generally restricted.
Two common uses
The first is reducing hours: the TTR income tops up a smaller pay packet so household cash flow stays roughly the same.
The second is a contribution strategy: continuing to work full time while salary sacrificing into super and replacing the reduced take-home pay with TTR income. Whether this leaves you better off depends on your marginal tax rate and current rules.
The trade-offs
Drawing income earlier means less compounding later. Earnings in a TTR are generally taxed like accumulation phase rather than being tax free. Fees may apply to running an additional account.
Who it may not suit
If you do not need the income and are not using it as part of a deliberate contribution strategy, a TTR often adds complexity without benefit. It is worth modelling the outcome before starting one.
Frequently asked questions
What is preservation age?
The age at which you can first access super, which depends on your date of birth. The ATO publishes the current schedule.
Can I take a lump sum from a TTR?
Generally no, other than in limited circumstances. TTR income streams are designed for regular payments within an annual maximum.
Does a TTR affect my Age Pension?
Most people using a TTR are below Age Pension age, but once eligible the balance is assessed under the means tests like other super.