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Transition to Retirement (TTR)

Using a Transition to Retirement strategy in the lead up to your retirement can bring many benefits. You may use it as a tax-saving strategy to boost your super, or as a way to reduce your working hours before you fully retire.

It’s important to make sure a TTR strategy is not only right for you, it’s set up correctly to make sure you’re maximising your super savings and minimising tax. It can be a very rewarding retirement strategy when set up correctly, especially with the guidance of a financial planner.

What is Transition to Retirement?

By setting up a Transition to Retirement account with First Super, you can transition to retirement in different ways. TTR can help you to:

  1. Boost your super before you retire and save on tax
  2. Reduce your working hours and maintain your income

You can use a Transition to Retirement strategy if you have reached your preservation age and are still working.

How does TTR work?

Boosting your super before you retire is a great way to make sure your money will last longer in retirement. It could make the difference between living a modest lifestyle or a comfortable lifestyle. Using a Transition to Retirement strategy can help you achieve this.

Let’s take a look at how it works…

Step 1

Open a First Super TTR account

Read Your Retirement Product Disclosure Statement to ensure this product suits your needs.

Then open up a First Super TTR account to set up the TTR strategy.

Step 2

Transfer some super into your First Super TTR account.

You will need a minimum of $10,000 to open a First Super TTR account.

You will also need to leave a minimum balance of $1,000 in your First Super superannuation account, so you can continue to receive employer contributions and make your own contributions.

Step 3

Have your employer contribute some of your salary to super

Salary Sacrifice may help you to save on income tax, as pre-tax contributions to super are taxed at a low rate of 15%, rather than at your current income tax rate.

Remember that there is a limit of $27,500 you can contribute to super this way each financial year.

Step 4

Withdraw regular income from your TTR account

As some of your salary is now directed to your super through salary sacrifice, you’ll have less take home pay. To meet your usual living expenses, you can use your payments from your First Super TTR to bridge the gap and ‘top-up’ your take home pay.

Your TTR payments become your replacement ‘salary’ and are tax-free if you are aged 60 and over. This TTR strategy helps to reduce your income tax as well as boosting your super before you retire.


Is a transition to retirement strategy right for you?

The benefits of transition to retirement can be great, however it’s not right for everyone. To help you decide if it’s right for you check out our FIRSTtalk video or speak with a financial planner.

Speak with a financial planner

Simple advice about your TTR options in retirement is included in your First Super membership fees, there’s no additional cost to chat with one of our financial planners.

Pros and cons of using TTR


Ease yourself into retirement: slowly reduce your working hours to give you more leisure time before you fully retire.

Boost super and save on tax: use salary sacrifice contributions to boost your super.

Salary sacrifice reduces your taxable income: meaning you may pay less tax on your income.

Pay less tax on pension income payments: if you are aged 60 and over, the income payments you receive from your TTR account are tax-free. If you’re under 60 payments are taxed at your income tax rate however you can receive a 15% tax offset.

Receive super contributions: continuing to receive some contributions to super from your employer helps replace some of the super you’ll withdraw as retirement income payments.


Complexity: Setting up a TTR strategy to save on tax can be complex. It’s best to seek the guidance of a financial adviser to make sure you’re making the most of the benefits available to you.

Uses up your super savings earlier: taking retirement payments from your TTR account earlier, will mean you have less money when you retire, impacting your retirement outcome.

Using TTR to reduce your working hours and maintain your current pay

Some people like to reduce their working hours before they fully retire. Changing to part-time work can be a great way to prepare yourself for retirement. However, the downside of reduced work hours is a reduced salary. Using TTR can allow you to ‘top-up’ your reduced salary with regular TTR income payments. Meaning you can work less but maintain your same income.

TTR Case study

  • Helen works fulltime earning $1,200 per week.
  • She plans to retire in 2 years but wants to reduce her working hours now, before fully retiring.
  • After speaking with a First Super Financial Planner, she decides to use a Transition to Retirement strategy and opens a First Super TTR Account.
  • This allows her to move from working 5 days per week to 3 ½ days per week.

Her reduced hours mean her salary is reduced, but she uses the retirement income payments to top-up her take home pay, so she still receives $1,200 per week.

$840 per week

salary from her employer

$360 per week

Transition to Retirement pension income payment


same take-home pay


Rules of TTR

There are a number of requirements you must meet under TTR rules:

  • Have reached your preservation age and still be working.
  • You must have at least $10,000 in super to set up a First Super TTR Account
  • If you are under 65 years, you must withdraw a minimum of 4% from your account balance each financial year, which begins on July 1st.
  • You can withdraw up to a maximum of 10% of your account balance per financial year.
  • Lump sum withdrawals cannot be paid until a condition of release occurs. Generally, this is
    • when you retire permanently after reaching your preservation age
    • terminate a gainful employment arrangement after age 60 — even if you don’t retire
    • or reach age 65
  • You can make concessional (pre-tax) contributions to your super account, currently capped at $27,500 for the 2023-24 financial year. Concessional contributions include employer contributions, salary sacrifice and member deductible (self-employed) contributions.
  • If you still have a TTR account at age 65, it will automatically switch to a Retirement Income account where your earnings on investments and income payments will be tax free.

What happens when you’re ready to retire?

When you decide to stop work and permanently retire before age 65, and you provide proof that you are permanently retired, your account will be switched to a Retirement Income account. This removes the TTR 10% annual payment restriction and the investment earnings on your account will become tax-free.

When you are ready to fully retire, call us on 1300 360 988. We can convert your Transition to Retirement Account to a First Super Retirement Income account. You’ll keep the same member number and firstonline login details, we’ll just switch your TTR account to a Retirement Income account. Switching your TTR to a retirement account means you continue to receive regular, flexible income payments throughout your retirement.

We’re here to help, so give us a call.

If you have any queries about transition to retirement, give us a call on 1300 360 988 or email us. If you would like some personal advice about how a First Super Transition to Retirement account could benefit you, ask to speak with one of our financial planners. You can speak with a First Super Financial Planner at no additional cost, so give us a call today to arrange a time to chat.

* % of initial balance and 1 July balance for subsequent years.