Retirement doesn’t always have to happen on a Friday afternoon when you finish work for the very last time.
For some Australians, there is a middle ground. You may be able to keep working, reduce your hours, or simply ease into retirement while drawing a regular income from part of your super.
This is known as a Transition to Retirement strategy, usually using a Transition to Retirement Income Stream (TRIS).
What is a Transition to Retirement income stream?
The Australian Taxation Office says a TRIS allows someone who has reached preservation age to access superannuation benefits without having to retire or leave their job.
The current preservation age is 60.
A TRIS is an account-based pension. While it remains subject to the transition-to-retirement rules, there are limits on how much can be withdrawn and lump-sum access is generally restricted.
Why might someone use TTR?
One of the biggest attractions is flexibility.
You might be mentally ready to slow down but not quite ready — financially or emotionally — to stop work completely.
A TTR strategy may allow you to reduce your working hours and use income from your super to help replace some of the wages you give up.
Imagine this
You are 60 and working five days a week, but you are exhausted. You would love to drop back to three days, but losing two days of pay feels too difficult. A TTR income stream may help bridge some of that income gap while you continue working.
The potential benefits of TTR
1. You may be able to work fewer hours.
A TTR income stream can potentially supplement your wages if you move from full-time work to fewer days each week.
2. You can ease into retirement gradually.
Instead of going from a busy working life to retirement overnight, you can experience what a shorter working week feels like and begin building a new routine.
3. It may give you more time while you still have the energy to enjoy it.
An extra day or two each week can mean more time for family, travel, hobbies, exercise, appointments or simply resting.
4. Some people combine TTR with salary sacrifice.
A person may choose to salary-sacrifice more of their employment income into super while drawing a TTR pension to help maintain their take-home cash flow. Whether this is beneficial depends on individual tax, contribution-cap and super circumstances.
5. You can access some super while continuing to work.
You do not have to fully retire or resign from your job simply to start a TRIS once you meet the eligibility rules.
6. It can make the final working years feel more manageable.
If work has started to feel physically or emotionally draining, reducing your hours may make the years before full retirement much more enjoyable.
How much can you withdraw?
A TRIS must meet the normal minimum pension payment rules and, while the transition-to-retirement restrictions apply, annual payments are capped at 10% of the account balance calculated under the relevant rules.
For many people under 65, the standard minimum annual pension percentage is 4%, although minimum-payment rules can change and should always be checked for the relevant financial year.
What about tax?
Tax treatment is one of the areas where individual circumstances matter.
For many people aged 60 or over receiving payments from a taxed superannuation fund, pension payments are generally tax-free. Different treatment can apply to untaxed components and certain funds.
It is also important to know that a TRIS that has not entered retirement phase is generally still treated as being in accumulation phase for fund earnings tax purposes. The earnings on the assets supporting it do not automatically receive the retirement-phase earnings tax exemption.
What happens when you turn 65?
Turning 65 is a full condition of release. At that point, super can generally be accessed without the transition-to-retirement cashing restrictions.
A TRIS may then move into retirement phase, subject to the applicable super rules and your fund’s administration.
TTR is not automatically better for everyone
There can be real benefits, but drawing from super earlier also means money is leaving your retirement savings sooner.
Your super balance, wages, tax position, planned retirement age, contribution strategy, other investments and how long you expect your savings to last can all affect whether the strategy makes sense.
Some people may benefit from a TTR strategy. Others may be better off leaving their super untouched for longer.
Questions worth asking before you start
- Does my super fund offer a transition-to-retirement income stream?
- How much income would I need if I reduced my working hours?
- How would drawing super now affect my balance later?
- Would salary sacrifice be useful in my circumstances?
- What contribution caps apply to me?
- What fees does my fund charge for running a pension account?
- What happens to my TTR account when I fully retire or turn 65?
Maybe retirement doesn’t have to be all or nothing
For people who are tired of working full-time but are not quite ready to stop completely, Transition to Retirement can provide another option to explore.
Perhaps the goal isn’t to escape work tomorrow. Perhaps it is simply to start creating a little more room in your life today.
Rules referenced from the Australian Taxation Office, including its guidance on Transition to Retirement Income Streams and super withdrawal conditions. Information checked 26 September 2026.