Retirement isn’t a switch you flick — it’s a journey. And if you’ve reached 60 and you’re not quite ready for retirement, a Transition to Retirement (TTR) pension could be your secret weapon for making that journey smoother, and more financially flexible.
 

What is a TTR pension?

A TTR pension is a way to access some of your super while you're still working, and before you’ve met one of the ‘conditions of release’ that qualify you for entire access to your retirement savings. It’s designed for people who want more flexibility with their finances and lifestyle as they approach retirement.

Here are three reasons why it might be worth considering:

1. You can ease into retirement without easing off your current lifestyle

Let’s be honest — going from full-time work to full-time leisure can feel like a big leap. A TTR pension lets you take it slow. You can reduce your working hours and use your super to top up your income, so you’re not sacrificing your lifestyle while you gain back some time.
Think of it as a financial cushion that supports your transition — whether that means working three days a week, spending more time with grandkids, or finally starting that pottery class.

2. Boost your take-home pay and grow your super – all at once

Still working full-time and not ready to slow down? A TTR strategy could help you do both: increase your take-home pay now and grow your super for later. By combining a TTR pension with salary sacrifice, you might reduce the tax you pay — since contributions are taxed at just 15% — and use your pension income to balance your budget. It’s a smart way to make the most of your final working years without feeling the pinch in your day-to-day finances.

Just keep in mind: this can be a complex strategy, and it might not suit everyone. It’s a good idea to speak with a financial adviser to make sure it’s right for your situation.

3. You stay in control of your retirement journey

One of the best things about a TTR pension? Flexibility. You can adjust your payments (within the minimum and maximum limits), pause or restart the pension, or convert it to a full retirement pension when you’re ready. It’s not a one-size-fits-all solution — it’s a tool you can tailor to your lifestyle, your goals, and your timeline

A TTR pension and a retirement phase pension are both types of income streams from your super, but they serve different purposes and have different rules.

Want to make sure your super is set up for your stage of life? Explore this article for practical tips and insights to help you get started.
 

Important things to consider

Before jumping into a TTR pension, here are a few practical things to keep in mind:

• Keep your super account open
  You’ll still need a regular super account to receive employer contributions (or any other contributions), as these can’t go directly into a pension account.
• Check your insurance cover
  If you have personal cover linked to your super accumulation account, you may want to keep that account active to maintain it. Talk to your super provider about your insurance options before starting your pension.
• Know when your TTR pension enters retirement phase
  Your TTR pension will automatically move into retirement phase when certain conditions are met — like fully retiring or turning 65. When that happens, your pension balance will count towards your transfer balance cap, which limits how much you can move into tax-free retirement income streams.
• Minimum and maximum withdrawals
  When you start a TTR pension, you’re required to withdraw an income within set limits each financial year – even if the pension starts part-way through the year.
  
  - Minimum withdrawal: 4% of your TTR pension balance
  - Maximum withdrawal: 10% of your TTR pension balance
  
  These percentages are based on your account balance as at 1 July each financial year and apply for the full year.
  
  - Pro-rata calculation: if starting a TTR pension part-way through a financial year, the 4% and 10% calculations are pro-rata based on the number of days remaining in the year.

These limits are set to ensure that retirement savings are used to fund your retirement, not left indefinitely in tax-free environments. It is essential to understand these limits to ensure compliance with tax obligations and to manage retirement income effectively.
 

So, is a TTR pension right for you?

Everyone’s situation is different, and while a TTR pension can be a smart move, it may not be the right fit for everyone. That’s why it’s a good idea to speak with a financial adviser before making any changes. They can help you understand how a TTR strategy can work with your broader retirement plan.
 

Need help?

Getting help is all part of being with MLC. Our team can answer your super questions and provide general advice on how to achieve your retirement goals – at no extra cost.

If you are a member with us, book your appointment with a Financial Coach today.