How to Transition to Retirement Smoothly in Australia
Easily transition to retirement with the right strategy. Learn how it works — and how an advisor can help you retire with confidence.
August 5, 2025
Written by:
Erin Truscott
Senior Financial Adviser
Retirement isn’t what it used to be — and thank goodness for that.
It used to be all or nothing — one day you’re on a full-time salary, the next you’re figuring out how to live off your super. That sudden switch doesn’t work for everyone.
These days, there’s a smarter, more flexible option called a transition to retirement.
It’s not a cold turkey goodbye to working life — it’s a gradual, stress-free glide into the next chapter. One where you can start accessing some of your super while still working (yes, really), reduce your hours without sacrificing your lifestyle, and lay the groundwork for a future that feels comfortable, not chaotic.
For many Aussies in their 50s and early 60s, the transition to retirement strategy is a bit of a game-changer — but it only works well when you plan it properly. And that’s where the right retirement planning advice makes all the difference.
Whether you’re just curious about how to ease into retirement, or you’ve heard about the Transition to Retirement strategy and want to know how it works — this guide’s for you.
Let’s walk through how it works, who it’s for, and how to make the most of it — with a little help from your financial advisor.
So, what exactly is a transition to retirement strategy?
In plain English, it’s a way to start tapping into your super while you’re still working. You don’t have to fully retire — instead, you can reduce your work hours and use your super to top up your income. Or, keep working full-time and use the strategy to save on tax and boost your super before you retire for good.
It’s flexible, clever, and — when used properly — can give you a much smoother (and more financially secure) path into retirement.
Let’s say you’re 60, still working full-time, but starting to feel like you’d love a bit more balance in life. With a TTR strategy, you could drop to four days a week, and use a small income stream from your super to make up for that lost day’s pay.
Or maybe you don’t want to cut back hours, but your income’s nudging you into a higher tax bracket. A financial advisor might recommend salary sacrificing more into super while drawing a TTR income stream — helping you boost your retirement savings and pay less tax now.
The transition to retirement strategy is generally available to anyone who’s:
It’s a fantastic option for people who aren’t quite ready to stop working — or don’t want to — but still want a taste of retirement freedom. And while it sounds simple, there are a few traps to avoid, which is where professional superannuation advice can be a real game-changer.
Alright, time to get into the nitty gritty. The transition to retirement rules aren’t hard to understand — but there are a few key things to know before you jump in.
Here’s the short version:
This is the age at which you’re allowed to access your super (without needing to fully retire). For most Aussies, that’s currently 59, but it depends on your date of birth.
Yep — the strategy is designed for people who are still employed (even if it’s just part-time). If you’ve already retired, you’ll be looking at a standard retirement income stream instead.
This is a type of pension account that pays you regular income from your super. You can draw between 4% and 10% of your TTR pension balance each financial year — but only while you’re under 65 and haven’t permanently retired. Once you retire or reach 65, these limits are removed, and you can withdraw as much as you like.
It’s important to note: Lump sum withdrawals aren’t allowed from a TTR pension until you’ve either permanently retired or turned 65. Until then, only regular income payments within the 4%–10% range are permitted.
If you’re under 60, TTR income is taxed at your marginal rate, but you get a 15% tax offset. Once you hit 60, it’s generally tax-free. Bonus.
Also, your super continues to be taxed at 15% on earnings — unlike a full retirement pension account, which enjoys zero tax. This is why good advice matters: there are often smarter ways to structure your accounts.
Most super funds offer some kind of transition to retirement strategy, but the features, fees and flexibility can vary quite a bit. Some provide online tools or calculators to help you model different scenarios — but those tools won’t always capture the full picture.
That’s why it helps to sit down with an advisor who can explain how the rules apply to your situation — not just the generic version.
We’ll show you how to transition smoothly, draw tax-effectively, and make your money last.
Like any financial strategy, transitioning to retirement comes with a few great perks — and a couple of caveats worth knowing.
Let’s break down the good, the not-so-good, and the stuff people often get wrong.
It’s not all sunshine and hammock naps, though. Here are a few things to be aware of:
These aren’t dealbreakers — but they’re exactly the kind of details you want to get right from the start.
Alright, so by now you’ve got a handle on what a transition to retirement strategy is — but is it actually worth it for you?
That’s where a transition to retirement calculator can come in handy.
These online tools let you plug in your income, super balance, age and planned work hours to estimate how much you could draw from your super, and what your future retirement savings might look like under different scenarios.
Some calculators go a step further — often called a transition to retirement pension calculator — and let you compare your potential tax savings, show how long your money might last in retirement, or model the impact of salary sacrificing.
One of the biggest questions people have when approaching retirement is:
“How much can I draw from super — and will it last?”
It’s a fair question. And the answer isn’t the same for everyone — some people need more in their super for a comfortable retirement, while others are OK with less.
According to ASFA, a comfortable retirement typically requires a super balance of around $690,000 for couples or $595,000 for singles — but your actual number depends on your lifestyle, income needs, and whether you own your home.
That’s where a licensed financial advisor steps in. We’re not just here to crunch numbers — we’re here to help you build a retirement that’s sustainable, comfortable, and worry-free.
We’ll show you how much you can draw from super without draining it too fast, how to balance your income stream with any remaining work income, and how to time your access so you don’t miss out on tax perks or hit avoidable thresholds.
What do you want retirement to feel like? Together, we map out your lifestyle goals and ensure your income strategy supports them — whether it’s travel, a sea change, or helping the grandkids out.
A good advisor can structure your TTR strategy so you pay less tax while still growing your super. Think smart use of salary sacrifice, income splitting, and choosing the right account types at the right time.
We help make sure your super lasts the distance — through careful modelling, investment strategies tailored to your risk comfort, and regular check-ins as life (and the economy) changes.
Don’t accidentally knock yourself out of Centrelink eligibility. We’ll help you structure things in a way that keeps you in the best possible position — both now and when you’re ready to stop working completely.
From withdrawing too much too soon, to underestimating future expenses or being caught out by legislative changes — we’ve seen the most frequent retirement planning mistakes time and time again. The good news is, were here to help you steer clear of them.
The truth is, a well-planned transition to retirement can unlock freedom, flexibility and confidence in your future. But going it alone? That’s when people tend to second-guess themselves — or worse, lose out without realising.
We’re here to take that pressure off, and help you glide into retirement knowing you’ve made the smartest moves for your situation.
Retirement is a big milestone — but the journey there doesn’t have to be overwhelming.
With the right strategy, the right structure, and the right support, you can move into this next chapter of life with confidence. No guesswork, no sleepless nights, and no nasty surprises down the track.
Whether you’re just starting to think about your options or already eyeing the exit sign at work, now’s the time to get expert guidance.
Because you don’t just want to retire — you want to retire well.
Want to know what a personalised transition to retirement plan could look like for you?
We’ll help you understand your options, model your income, navigate the tax stuff, and show you how to make the most of your super — all in a way that supports the lifestyle you actually want.
Let’s chat. Book a complementary discovery call with one of our advisors and start building your retirement with clarity and confidence.
Planning for retirement isn’t just about numbers — it’s about your lifestyle, your values, and feeling confident in the road ahead.
In this video, Erin shares how we work with clients to simplify the complex, create personalised strategies, and guide you through every step of your transition to retirement.
A transition to retirement (TTR) strategy allows you to access a portion of your super while you’re still working. It’s designed to help people ease into retirement by supplementing their income, reducing working hours, or saving more through tax-effective strategies. You’ll receive regular income payments from your super, but there are rules around how much you can withdraw and when.
Once you’ve reached your preservation age, you can start a TTR income stream from your super. This means you can draw between 4% and 10% of your TTR pension balance each financial year while continuing to work. These limits apply until you fully retire or turn 65.
Depending on your goals, this can either supplement reduced work income or help you boost your super by salary sacrificing more into it while drawing a replacement income from your TTR account.
Pros:
Cons:
Yes, you can. Many people use a TTR strategy while working full-time to take advantage of tax savings — for example, salary sacrificing into super while drawing a smaller, tax-advantaged income stream. You don’t have to reduce your hours, but you do need to meet the preservation age and follow the withdrawal limits.
If you’re aged 60 or over, your TTR income is generally tax-free. If you’re under 60, the income is taxed at your marginal tax rate — but you’ll receive a 15% tax offset, which reduces the tax you pay. Your super fund’s investment earnings within the TTR account are still taxed at up to 15% until you fully retire or turn 65.
There’s no set minimum, but whether a TTR strategy is worthwhile depends on your goals, super balance, and retirement income needs.
As a rough guide, having at least $100,000–$150,000 in super can make the strategy more effective, but personalised advice is key — especially if you’re looking to use it for tax savings or income top-ups.
Some super funds may also have their own minimum balance requirements, typically around $20,000–$50,000.
Look for a fund that offers flexible TTR income stream options, competitive fees, strong long-term performance, and support tools like calculators or access to advice. Make sure the fund’s investment options align with your retirement timeline and risk profile.
An advisor can also help you assess whether your current fund is suitable or if a switch might improve your outcomes.
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This is a publication of Direct Wealth Pty Ltd, a wholly owned subsidiary of Direct Wealth Group Pty Ltd.
General Advice Warning – The information contained in this article is of a general nature and does not take into account your particular objectives, financial situation or needs. You should therefore consider the appropriateness of the advice for your situation before acting on it. You should obtain and consider the relevant Product Disclosure Statement (PDS) and seek the assistance of an authorised financial adviser before making any decisions regarding any products or strategies mentioned in this publication.
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