Transition to Retirement Pension

Selecting the Transition to Retirement option may help you move gradually into retirement.

A feature of the AustralianSuper Pension is the Transition to Retirement option.

Depending on your circumstances, this option may help to:

• Supplement your income if you cut down your working hours
• Start receiving an income if you’re not working at all
• Reduce the amount of tax you pay
• Potentially increase your retirement savings.

Supplement your income
Taking up a pension using the Transition to Retirement option may help you cut back on your working hours. The income you lose when you reduce the amount you’re working can be supplemented by regular pension payments.

Receive an income
If you’re not currently working, accessing your super using the Transition to Retirement option may provide you with a regular income.

Reduce the amount of tax you pay
No tax is generally payable when you transfer your money into a pension and no tax is payable on any investment returns earned in a pension account.

If you’re under 60 years of age, your pension payments are subject to income tax. However, some of your pension may be tax-free and you’ll receive a 15% tax offset on any taxable proportion.

If you’re 60 or over, the pension payments you receive are tax-free.

Increase your retirement savings
Making additional contributions via a salary sacrifice arrangement and supplementing your income with pension payments may help boost your retirement savings.

You may want to speak to a financial planner about how a pension could help you grow your retirement savings and reduce your tax.

Eligibility
To be eligible to take up the Transition to Retirement option, you need to have reached your minimum age (see table below) and be between 55 and 64 years of age. This age is often called your preservation age.

There are minimum and maximum limits on the amount you can withdraw each financial year. Between age 55 and 64, the minimum is 4%. The maximum amount is 10% of your account balance under the Transition to Retirement option only.

These restrictions apply until you permanently retire, change employment on or after age 60 or reach age 65.