Transition to Retirement strategies
Transition to Retirement (TTR) strategies can enable you to keep earning while making the most of your super.
When you reach your preservation age, you can access your super as a Transition to Retirement (TTR) pension without having to retire. This means you can keep earning a wage, while starting to draw down on your super. This strategy can also have some tax benefits.
TTR explained
A TTR account is a second kind of account (an account-based pension) which you can have within super. Your regular super account which your employer contributes into is called an accumulation account, this accumulates in value through your working life.
A TTR account isn’t designed to accrue value over time. You start your TTR with a lump sum from your accumulation account. You can then draw down regular pension payments from your TTR as a second source of income. So, you could be receiving regular monthly payments in to your bank account, from your TTR. You can’t add any more money to it – and neither can your employer – so while you’re working, your employer will keep making regular SG payments into your normal accumulation account.
When you open a TTR account, your money is still invested, and it’s still considered superannuation, however (with limitations) you can start to draw down in to your bank account. A TTR pension can be rolled back into your super accumulation account at any time, you’re not locked in for a particular term.
Using a TTR to reduce work hours
As you approach retirement you might like to reduce your work hours without reducing your income. A TTR pension can be used to supplement your income if you decide to reduce your work hours.
This could mean less money in retirement. If you start drawing down your super early it may impact the lifestyle you can achieve through retirement.
Using a TTR strategy to reduce tax
The tax treatment of super & TTR accounts means that there can be potential for tax concessions. There are a few steps in the process – essentially you put more of your wage in to your regular super account through salary sacrifice, which means you have less in your pocket. You replace that money with payments from your TTR account. You can end up with the same amount of money, while paying less tax.
Transition to Retirement Pension features
Suitable for people who are still working and have reached their preservation age and want to save tax while growing their super, or supplement their income by accessing their super savings (up to 10% of your TTR account balance per financial year).
Minimum investment amount |
$20,000 |
Payment frequency |
Twice monthly, monthly, quarterly, half-yearly or yearly. |
Payment amount |
You can choose an income between your minimum and maximum limits. |
Investment options |
There are 11 investment options available, including a self-managed option, the Direct Investment option. |
Lump sum withdrawals |
You cannot have partial or full lump sum withdrawals from a TTR account. You can only receive pension payments up to your maximum limit. |
Account closure |
You can roll back your TTR account in to your regular super account at any time. You are not locked in to a TTR account for any defined term. |
How to set up your TTR account
We recommend obtaining advice when establishing your TTR account & strategy. Face to face, online or over the phone, our Client Service Managers can give you the perfect game plan for your super.
- Get your game plan. Speak to your adviser, or with one of our Client Service Managers to establish a plan.
- Download and read the legalsuper Pension Product Disclosure Statement
- Complete the Pension membership application form at the back of the Pension PDS. If you are under age 60, you must also complete and attach to the application form a TFN Declaration form from the Australian Taxation Office (ATO).
- If you are transferring monies from another fund, you may also need to complete a legalsuper Request to transfer form, to consolidate your superannuation into your legalsuper superannuation account. Your legalsuper superannuation account will be converted to your legalsuper pension account once all transfers are received.
Fees & costs of a TTR account
legalsuper works hard to keep fees and costs low. Our sole purpose is to maximise the retirement savings of our members. We do not pay commission to agents and are an ‘all profits for members’ fund. Find out more about legalsuper's Transition to Retirement Pension Fees.
How to consolidate your super into a TTR account
- Submit your paperwork with certified ID as detailed on the application form.
- Once your application is accepted by legalsuper, and your account is established, you will receive a summary that shows the details of your pension.
- You will receive your income payments by Electronic Funds Transfer (EFT) to your bank, building society or credit union account, to your nominated schedule.
- Review your strategy annually.
Need more help? Contact our Client Services team
All Client Service Managers are registered on the Australian Securities and Investment Commission Financial Adviser Register. This register shows where a financial adviser has worked, their qualifications, training, memberships of professional bodies, and what products they can advise on.