Key points
- You can access super via a Transition to Retirement Income Stream (TRIS) without retiring.
- TRIS allows part-time work while drawing income from super.
- Tax benefits vary based on age and preservation status.
Reducing your hours at work may be appealing but how do you maintain your income to make the most of more time away from work?
The good news is that it is possible to access your superannuation as part of a transition to retirement plan. But there are rules that affect when and how much of your superannuation you can access to supplement your working income.
In this article we take you through the rules you need to know to create a tax effective transition to retirement strategy that works for you.
Do I have to retire to access my superannuation?
You don’t have to wait until you have stopped working to access your superannuation.
Once you’ve reached your preservation age, you can use some of your superannuation to supplement your income.
What is my preservation age?
Your preservation age is not the same as your pension age. It will be between 55 and 60 depending on when you were born. It will also be on your superannuation fund account details.
| Your date of birth | Age you can access your super (preservation age) |
| Before 1 July 1960 | 55 |
| 1 July 1960 – 30 June 1961 | 56 |
| 1 July 1961 – 30 June 1962 | 57 |
| 1 July 1962 – 30 June 1963 | 58 |
| 1 July 1963 – 30 June 1964 | 59 |
| After 1 July 1964 | 60 |
Open a transition to retirement pension
To access your superannuation before you are 65, you need to open a Retirement Income Account or a Transition to Retirement Pension with some of your superannuation finances. You must keep your superannuation account.
You need to have more than $25,000 in your superannuation account to open a Transition to Retirement account.
How much of my superannuation can I access to transition to retirement?
Once you have reached your preservation age you can access a minimum of 4% and a maximum of 10% of your superannuation account balance each year.
Your superannuation account balance is how much you have in your fund on the day you open your Transition to Retirement Pension account. It then resets on July 1 each year.
If you stop working and are still under 65 you can access more than 10% of your superannuation. This removal of the maximum access limit also applies once you turn 65.
Tax benefits with transition to retirement
Superannuation is still the most tax effective form of saving. Having both a superannuation account and a Transition to Retirement Pension account may allow you to minimise tax and boost your superannuation. You can still get your employer superannuation contributions and make other tax effective voluntary contributions.
If you reduce your work hours you can supplement that lost income. The money you withdraw is tax free once you are over 60 years of age.
If you stay working full time you can invest your tax-free Transition to Retirement Pension funds back into your superannuation account to enjoy further tax savings while maintaining your superannuation account balance.
If your work allows you to salary sacrifice, another option could be to move some of your salary into superannuation. Then use your Transition to Retirement account to supplement your take home pay. The tax payable on your salary sacrifice contributions will need to be less than the tax you pay on your salary to be a tax beneficial option.
Expert help with the transition to retirement
When thinking about your transition to retirement it can be difficult to know where to start or seem too hard. Setting up a Transition to Retirement Pension is relatively straight forward but having a well thought out and effective Transition to Retirement financial plan or strategy is key to securing a comfortable and enjoyable future.
Pitcher Partners’ experienced wealth managers can give you the right advice to create a transition to retirement strategy that suits you. Giving you peace of mind that it is set up correctly and maximising your tax benefits.
Retirement is not just about money. Pitcher Partners’ private client advisers work with other team members to help you get clear on what retirement means to you and what you need to do to get there. Read more here.
