--- title: The Transition to Retirement Pension Explained description: The transition to retirement (TTR) pension is a popular option for people who plan to continue working while starting to draw some of their super benefits... image: https://www.altusfinancial.com.au/hubfs/Blog_Hero_Images/The-Transition-to-Retirement-Pension-Explained.jpg --- [![Logo](https://www.altusfinancial.com.au/hubfs/Logo.svg "Logo")](https://www.altusfinancial.com.au/) - [![](https://www.altusfinancial.com.au/hubfs/1.%202017%20Assets/Dark_Phone.svg)](tel:+61289083444) [![Talk with us](https://no-cache.hubspot.com/cta/default/512115/6a87cb2e-17ae-43a1-93c7-da9582e08c36.png)](https://cta-redirect.hubspot.com/cta/redirect/512115/6a87cb2e-17ae-43a1-93c7-da9582e08c36) ##### Accounting & Business Services ##### Wealth Services ##### Lending Sources ##### [Need Real-life Advice?](https://www.altusfinancial.com.au/request-a-consultation) [![Talk with us](https://no-cache.hubspot.com/cta/default/512115/6a87cb2e-17ae-43a1-93c7-da9582e08c36.png)](https://cta-redirect.hubspot.com/cta/redirect/512115/6a87cb2e-17ae-43a1-93c7-da9582e08c36) [![page-1 (5)](https://www.altusfinancial.com.au/hubfs/page-1%20(5).svg "page-1 (5)")](https://www.altusfinancial.com.au) - ![](https://www.altusfinancial.com.au/hubfs/Assets%20Jan%202019/Images/group-14%20(1).svg)![](https://www.altusfinancial.com.au/hubfs/Assets%20Jan%202019/Images/group-17%20(1).svg) - ##### MENU - [![](https://www.altusfinancial.com.au/hubfs/Assets%20Jan%202019/Images/phone-call%20(6).svg)![](https://www.altusfinancial.com.au/hubfs/Assets%20Jan%202019/Images/phone-call-2.svg)](tel:1300832962) - ##### MENU [![Talk With Us](https://no-cache.hubspot.com/cta/default/512115/11099956-4246-4311-83f2-64fc6560f370.png)](https://cta-redirect.hubspot.com/cta/redirect/512115/11099956-4246-4311-83f2-64fc6560f370) - [![](https://www.altusfinancial.com.au/hubfs/Assets%20Jan%202019/Images/phone-call-2%20(1).svg)](tel:+61%202%208908%203444) - ![](https://www.altusfinancial.com.au/hubfs/close.svg) CLOSE - [Instagram](https://www.instagram.com/altus_financial/) - [LinkedIn](https://www.linkedin.com/company/2339369/admin/) - [Facebook](https://www.facebook.com/AltusFinancial/) - [Business (242)](https://www.altusfinancial.com.au/blog/topic/business) - [Strategy (150)](https://www.altusfinancial.com.au/blog/topic/strategy) - [Wealth (142)](https://www.altusfinancial.com.au/blog/topic/wealth) - [Super (56)](https://www.altusfinancial.com.au/blog/topic/super) - [CFO (48)](https://www.altusfinancial.com.au/blog/topic/cfo) - [Growth (38)](https://www.altusfinancial.com.au/blog/topic/growth) - [Business Succession (25)](https://www.altusfinancial.com.au/blog/topic/business-succession) [![Helpful Resources](https://no-cache.hubspot.com/cta/default/512115/11b7293b-309b-4f1b-af85-27ec1dd19a35.png)](https://cta-redirect.hubspot.com/cta/redirect/512115/11b7293b-309b-4f1b-af85-27ec1dd19a35) Request a Consultation - Close![](https://www.altusfinancial.com.au/hubfs/Assets%20Jan%202019/Images/close%20(3).svg) ## Request a Consultation - [Wealth](https://www.altusfinancial.com.au/blog/topic/wealth) - [Super](https://www.altusfinancial.com.au/blog/topic/super) - [Tax](https://www.altusfinancial.com.au/blog/topic/tax) # [Division 296 tax: what high-balance super members need to do now](https://www.altusfinancial.com.au/blog/division-296-tax-what-high-balance-super-members-need-to-do-now) From 1 July 2026, Division 296 will introduce additional tax on superannuation balances above $3 million. For many Australians, this will be a marginal change. For high-balance super members, it’s something more significant — a shift that could reshape how sup..... ###### Altus Team #### Latest Posts [Wealth](https://www.altusfinancial.com.au/blog/topic/wealth), [Super](https://www.altusfinancial.com.au/blog/topic/super), [Tax](https://www.altusfinancial.com.au/blog/topic/tax) ##### [Division 296 tax: what high-balance super members need to do now](https://www.altusfinancial.com.au/blog/division-296-tax-what-high-balance-super-members-need-to-do-now) [Business](https://www.altusfinancial.com.au/blog/topic/business), [FBT](https://www.altusfinancial.com.au/blog/topic/fbt), [Accounting](https://www.altusfinancial.com.au/blog/topic/accounting) ##### [Common FBT Questions and Answers](https://www.altusfinancial.com.au/blog/common-fbt-questions-and-answers) [Super](https://www.altusfinancial.com.au/blog/topic/super), [Business](https://www.altusfinancial.com.au/blog/topic/business) ##### [Pay Day Super Is Coming: What SMEs Should Be Doing Now](https://www.altusfinancial.com.au/blog/pay-day-super-is-coming-what-smes-should-be-doing-now) [Lending](https://www.altusfinancial.com.au/blog/topic/lending) ##### [Supporting the Next Generation into Property](https://www.altusfinancial.com.au/blog/supporting-the-next-generation-into-property) [Wealth](https://www.altusfinancial.com.au/blog/topic/wealth), [Budget](https://www.altusfinancial.com.au/blog/topic/budget), [Risk](https://www.altusfinancial.com.au/blog/topic/risk) ##### [Rising Insurance Premiums: What’s Really Going On, and What You Can Do About It](https://www.altusfinancial.com.au/blog/rising-insurance-premiums) [Wealth](https://www.altusfinancial.com.au/blog/topic/wealth) - 6 min read ## [The Transition to Retirement Pension Explained](https://www.altusfinancial.com.au/blog/the-transition-to-retirement-pension-explained) ###### Matt Smith - SHARE: - [**](http://www.linkedin.com/shareArticle?mini=true&url=https://www.altusfinancial.com.au/blog/the-transition-to-retirement-pension-explained) - [**](https://www.twitter.com/share?url=https%3A%2F%2Fwww.altusfinancial.com.au%2Fblog%2Fthe-transition-to-retirement-pension-explained) - [**](https://www.facebook.com/sharer/sharer.php?u=https%3A%2F%2Fwww.altusfinancial.com.au%2Fblog%2Fthe-transition-to-retirement-pension-explained) The transition to retirement (TTR) pension is a popular option for people who plan to continue working while starting to draw some of their super benefits, or for people who need to accelerate their savings rate in the last few years before they retire.  The transition to retirement pension is often a worthwhile strategy, but how do you decide whether it’s right for your financial situation? We’ve put this article together to help you make an informed decision about whether or not TTR would be advantageous for you. Of course, it’s best to talk with your wealth management adviser about something as important as when to start drawing your super benefits, but if you understand your options well, you’ll be in a better position during that discussion. Let’s start at the very beginning by defining the transition to retirement pension.   ## What is the Transition to Retirement Pension? Transition to retirement gives you more options while you’re still working, as long as you have reached the preservation age. You can start receiving some of your super benefits while you’re still working, and this can mean more money when you fully retire.  **Here’s how it works: **you open a retirement income account in addition to your regular super account. Although it may seem unnecessarily complicated to have two retirement accounts, they work together to optimise your tax situation, and they may also help you get to your goals quicker by maximising your super savings in the last few years before you retire completely.  **In order to take advantage of the transition to retirement pension, you need at least $25,000 in your super account. ** There are a couple of ways you can approach TTR. You may start working fewer hours and use your super to replace the lost income. In this way, your take-home pay remains the same, even though you’re working part-time. Many people appreciate this option because it allows them to ease into their retirement lifestyle, rather than a sudden and dramatic change of pace. You can also use TTR to save more. If you have some lost ground to make up with your super savings, you can pay some of your salary directly into your super. This method allows you to save on taxes. You can replace this money with payments from your super, so your take-home pay is still the same as it was before.    ## Changes to the Transition to Retirement Pension Don’t forget, the new TTR changes take place on 1 July 2017. This means that any earnings and gains from investments held in a Transition to Retirement (TTR) pension won’t be exempt and will be taxed at 15%. This change applies to new and existing TTR income streams regardless of the date of commencement.  Additionally, superannuation income streams will no longer be allowed to treat certain superannuation income stream payments as lump sums for tax purposes. You can view a full run down of the superannuation changes [here](https://www.altusfinancial.com.au/latest-news-1/australian-superannuation-changes-on-1-july-2017). ## Things to Consider Before you decide whether or not to pursue the transition to retirement route, let’s take a look at a few considerations. Again, it’s wise to [talk this option through with a wealth management adviser](https://www.altusfinancial.com.au/get-ready-for-my-retirement?__hstc=71823948.aa7161d24650a8517734325a218c7524.1477629203810.1494484428134.1494804635788.124&__hssc=71823948.3.1494804635788&__hsfp=2586981291) who understands your long-term goals.    [![New Call-to-action](https://no-cache.hubspot.com/cta/default/512115/d5bbabf2-dd9e-4b5e-8aaa-7961f2968b46.png)](https://cta-redirect.hubspot.com/cta/redirect/512115/d5bbabf2-dd9e-4b5e-8aaa-7961f2968b46)   Learn about the tax implications** - **Once you have your income squared away, you should review the tax implications of TTR. Factors that affect TTR can be complicated, so check with your wealth management adviser or a tax accountant. Evaluate your retirement strategy** -** If you already have a retirement plan in place, consider how TTR would fit in with your existing plan. Do you need to boost your super in the last few years before you retire? Have you been planning on reducing your hours in order to ease into retirement? If you don’t have an existing retirement strategy, there’s no time like the present to put one in place. Check your fund type** -** Accumulation super funds are compatible with TTR, but some other kinds of super funds are not. For example, members of defined benefit funds are not eligible for transition to retirement pensions.  Coordinate your life insurance** -** Some people have life insurance through their super funds, and their policies may be affected by TTR. Talk with your wealth management adviser to find out if your insurance could cease or be reduced by these changes. ## Retirement Planning Guide As you can see, transition to retirement pension accounts have several benefits. The key to taking advantage of these is deciding on what you want out of retirement and then charting your course to get there.  [Creating your own retirement plan](https://www.altusfinancial.com.au/retirement-planning-guide) that suits your unique situation and your personal goals will help you to live the retirement you’ve worked hard for. Contact your wealth management adviser to go over your existing retirement plan or to start creating a plan from scratch. Once you know exactly where you stand financially, and how much you need in order to live the lifestyle you want in retirement, you’ll know whether you can reduce your working hours or whether you should continue to save money.  If you haven’t yet worked with a wealth management adviser, [reach out to us](https://www.altusfinancial.com.au/contact-us) at Altus Financial. 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