
Strategies for a smooth transition to retirement
With John Mujic, Prosperity
Retirement isn’t just a destination—it’s a journey, and for Australians approaching this next chapter, a Transition to Retirement (TTR) pension can be a game-changer. Whether you’re looking to cut back on work, boost your super, or simply reduce your tax bill, a TTR strategy offers a flexible way to make the most of your hard-earned savings.
What is a Transition to Retirement Pension?
A TTR pension allows individuals who have reached their preservation age (now 60) to access a portion of their super while still working. Think of it as a financial bridge—helping you maintain your lifestyle if you’re reducing your work hours or supercharging your retirement savings in a tax-effective way.
Why Consider a TTR Pension?
1. Maintain Your Lifestyle – If you’re winding down at work, a TTR pension can top up your income so you don’t have to compromise on the things you enjoy.
2. Boost Your Super While Paying Less Tax – Since TTR pension payments are tax-free from age 60, combining this with salary sacrificing can increase your super and lower your taxable income.
How Does It Work?
Starting a TTR pension involves transferring a portion of your super into a TTR pension account, while leaving some funds in your super to continue receiving employer contributions. You then receive regular income payments from your TTR pension—either to supplement your salary or to reinvest into your super.

A Real-Life Example: How a TTR Pension Can Save You Tax
Let’s say Sarah is 60 years old, earns $150,000 annually, and has a super balance of $400,000. She wants to maximise her savings before retirement while reducing her tax bill.
Her Strategy:
- Salary sacrifices $15,000 of her pre-tax income into super, lowering her taxable income to $135,000.
- Starts a TTR pension by transferring $200,000 of her super into an account-based pension.
- Withdraws $10,000 per year from the TTR pension—tax-free.
The Result?
- Without a TTR strategy, Sarah would pay $39,838 in tax.
- With a TTR pension and salary sacrificing, she only pays $33,988 in tax.
- After considering 15% contributions tax, she saves $3,600 in tax while growing her super.
Is a TTR Pension Right for You?
A TTR pension can be an effective way to reduce tax and improve financial security, but it’s important to consider how drawing on your super early might impact your long-term savings. It’s also crucial to keep track of contribution limits—currently $30,000 per year for concessional (pre-tax) contributions, including employer contributions.
Final Thoughts
A well-planned TTR strategy can help you take control of your finances and ease into retirement with confidence. To find out if a TTR pension is right for you, speak to a professional who can tailor the approach to your unique situation.
For expert advice, contact:
John Mujic, Financial Adviser
jmujic@prosperity.com.au
Disclaimer:
This article contains information that is general in nature. It does not take into account the objectives, financial situation, or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. Prosperity Wealth Advisers (ABN 34 191 396 376) is an authorised representative of Prosperity Wealth Advisory Services Pty Ltd, Australian Financial Services Licensee (533675).