Formally it is a transition to retirement income stream, an account-based pension with training wheels. You open it with part of your super, leave your accumulation account open for employer contributions, and nominate how much income you want inside the allowed band.

The training wheels matter. Until you retire or turn 65, a TTR pension is what the ATO calls non-commutable: you generally cannot cash it out as a lump sum. It pays a regular income, nothing more. You can, however, stop it and roll the money back into your accumulation account if your plans change.

One mechanical quirk worth knowing: once a TTR pension starts, you cannot add to it. New contributions land in your accumulation account. If you later want to combine them, you stop the pension and restart it with the larger balance.

Preservation age, the age you can first touch your super without retiring, finished its long climb in 2024. It is 60 for anyone born on or after 1 July 1964, and everyone born earlier has already passed theirs. You will still find websites saying you can start a TTR strategy from 55. That has not been true for years, and it is a reasonable test of whether the page you are reading is being kept up to date.

Beyond age, the practical requirements are simple. You need to be working, since the whole point is accessing super without retiring. You need enough super to make the exercise worthwhile, more on that in the traps section. And you need to keep your accumulation account open with a working balance, both to receive employer contributions and to keep paying any insurance premiums attached to it.

If you have already retired, or you are 65 or older, you do not need a TTR pension at all. You have full access to your super and an ordinary account-based pension does the same job with better tax treatment on earnings.

Two separate taxes are in play, and most articles only tell you about the first.

Tax on what you draw out. From age 60, payments from a taxed super fund (which covers most Australians) are tax-free and do not even go in your tax return. The exception is members of some government schemes with an untaxed element, where payments are taxed at marginal rates with a 10% offset. If you spent part of your career in the public service, check which kind of scheme you have before assuming tax-free.

Tax on what stays in. Since 1 July 2017, earnings on the investments inside a TTR pension are taxed at 15%, the same as your accumulation account. The old rule, where TTR assets earned income tax-free, is gone. That tax exemption now only arrives when the pension enters what the ATO calls the retirement phase, which happens when you retire or turn 65 (section 8 covers this).

This 2017 change is why older articles, and some adviser marketing, overstate the strategy. Before 2017 a TTR pension gave you a tax-free earnings environment while you were still working. Today it does not. What survives is still real: tax-free income from 60, and the gap between your marginal tax rate and the 15% contributions tax when you pair a TTR with salary sacrifice. But the strategy earns its keep on those two legs alone, so the numbers deserve to be run honestly.

Say you are 61, working full time in Logan on $80,000, and you want Fridays and Mondays back. Three days a week takes your salary to $48,000. Here is the arithmetic on 2026-27 resident tax rates:

Notice the tax system does part of the work for you. Your salary fell by 40% but your take-home only fell by 34%, because the hours you gave up were your highest-taxed dollars.

A TTR pension closes the rest. On a super balance of $320,000, drawing $21,760 is 6.8% of the balance, comfortably inside the 4% to 10% band, and from age 60 it lands in your account tax-free for most people. Same money in hand, two extra days a week.

The honest cost: you are spending retirement savings early. Your employer is still contributing 12% on the part-time salary (about $4,900 a year after contributions tax), so the net drawdown on your super is closer to $16,900 a year before earnings. Whether that trade is worth it depends on what the balance needs to look like at full retirement, which is a question our guide on how much super you need to retire can help you frame.

Illustration only. Uses 2026-27 resident rates plus the 2% Medicare levy and ignores tax offsets, deductions and investment earnings. Your numbers will differ.

The mechanics: keep working full time, push part of your salary into super before tax, and draw a TTR pension to keep your lifestyle funded. The gain is the gap between your marginal tax rate and the 15% contributions tax, harvested on every dollar you sacrifice.

Say you are 60, working in Springwood on $100,000. Your employer pays $12,000 in super guarantee, which leaves $20,500 of room under the 2026-27 concessional cap of $32,500. You sacrifice the lot:

That $3,485 is not investment magic. It is 17 cents of tax saved on each of the $20,500 sacrificed dollars: 32% (your marginal rate plus Medicare) down to 15%. The same logic means the strategy thins out at lower incomes. Below about $45,000 your marginal rate is close to the contributions tax and there is little left to harvest.

Two boosters worth checking. If your total super balance was under $500,000 at the last 30 June, you may have unused concessional cap from up to five earlier years that can be used on top of this year's cap. And salary sacrificing does not shrink your employer contributions, which are calculated on earnings that include the amounts you sacrifice. Since 1 July 2026 employer super also arrives every payday rather than quarterly.

The TTR draw of $13,940 on a $300,000 balance is 4.6%, just above the minimum. If your balance is much smaller, the required 4% minimum draw starts to work against the strategy, which is one of the traps below.

Illustration only. Uses 2026-27 resident rates plus the 2% Medicare levy and ignores tax offsets, deductions and investment earnings. Your numbers will differ.

This is the section none of the pages ranking for TTR bother to write, and it matters most for exactly the households a TTR pension attracts: people in their early 60s whose retirement will be part super, part Age Pension.

The mechanics at 67 are straightforward to state. Services Australia includes an account-based pension in both the Age Pension income test and the assets test, and choices like starting regular payments or taking lump sums can change your entitlement. The mechanics before 67 are now easy to state too. Services Australia does not count super in the accumulation phase while its owner is under Age Pension age, and that includes your partner's super. Starting a TTR pension changes that: once a fund is paying you an income stream it becomes assessable, whatever your age. So if your partner already gets a means-tested payment, starting your TTR pension can reduce it, and a Services Australia Financial Information Service officer can walk through your case for free.

The planning question is the trade-off. Draw harder on super now and you may arrive at 67 with a smaller balance and a larger Age Pension entitlement, but less private income for the decades after. Preserve super now and the reverse. Neither is automatically right; it depends on your health, your housing, your partner's age and what the income and assets tests look like when you get there. The point is to model the whole runway to 67 and beyond before you set a drawdown rate, not after.

Starting with too little super. A TTR pension must pay you at least 4% a year whether you need it or not. On a small balance, the forced drawdown plus a second set of account fees can outweigh any tax saving. There is no official floor, but if the sums only work by drawing money you would rather leave invested, that is your answer.

Letting insurance lapse. Life and disability cover held inside super is paid from your accumulation account. Move too much into the TTR pension and the premiums can drain what is left, or the cover can lapse entirely. At 61, replacing that cover is somewhere between expensive and impossible. Check the insurance before you move a dollar.

Taking 10% because you can. The maximum is a ceiling, not a suggestion. Drawing hard in a year when markets fall compounds the damage, because you are selling more units at lower prices to fund the same income. Your drawdown rate is a dial to revisit every 1 July, not a default.

Forgetting the 15% earnings tax. If you are weighing a TTR pension purely as a tax play, remember the earnings inside it are taxed like accumulation until you retire or turn 65. Strategies modelled on pre-2017 rules flatter themselves.

Not telling your fund when you actually retire. If you retire before 65, the tax exemption on earnings only starts when you notify your fund, not when you stopped work. People routinely leave this for months. On a decent balance that is real money handed to the tax office for no reason.

Breaching the band. Pay out less than the minimum or more than the 10% maximum and the consequences are ugly: the ATO can treat the year's payments as unauthorised early access, taxed at marginal rates. Good funds police this for you; if you run your own SMSF, the discipline is yours.

For completeness: from 1 July 2026 balances above $3 million attract additional tax on a portion of earnings under Division 296. If that is you, TTR decisions belong inside a broader strategy conversation anyway.

The ATO calls this entering the retirement phase, and it changes three things at once. The investment earnings supporting your pension stop being taxed at 15% and become tax-free. The 10% maximum drawdown and the lump-sum restrictions fall away, leaving only the age-based minimums. And the pension balance is measured against your transfer balance cap, the lifetime limit on money moved into tax-free retirement pensions, which is $2.1 million for someone starting their first retirement pension in 2026-27.

The triggers: turning 65 does it automatically, no paperwork. Retiring before 65 does it from the day you notify your fund, where retiring means ceasing an employment arrangement after 60, or stopping work with no intention of returning. Permanent incapacity and terminal illness also qualify.

Two practical notes. First, the notification point from the traps section: the tax benefit starts when your fund knows, so tell them promptly. Second, conversion is a natural moment to redesign the whole arrangement, consolidate accounts, revisit the investment mix for a genuine drawdown phase and reset the income level, rather than letting the old TTR settings roll forward by inertia. That redesign conversation is the core of our retirement planning work.