There’s a myth that retirement happens on a single Friday afternoon: you clean out your desk, hand back the swipe card, and wake up Monday with nowhere in particular to be.
For plenty of people, that’s a jarring way to end a career.
A transition to retirement income stream (TRIS) strategy offers something gentler: a dress rehearsal before diving in head-first.
TRIS pensions explained
Once you reach your preservation age, now a flat 60 for every Australian, you can open a TRIS pension using part of your super, even while you’re still working full-time. Unlike a standard account-based pension, you don’t need to have retired or turned 65. You simply need to have reached the age of 601
- You can draw between 4% and 10% of your account balance each year.
- Lump sums generally aren’t available as this is a non-commutable income stream.
- At 65, or once you meet a full condition of release, it automatically converts into a regular account-based pension with no restrictions.
Phasing down work gradually
This is where TRIS earns its name. For example, you could reduce your working week from five days to three and use the pension payments to fill the gap in your pay packet. You keep your income steady, keep your super growing through ongoing employer contributions, and give yourself room to figure out what retirement feels like, without burning the bridge back to full-time work.
Tax benefits and contribution strategies
The more common use, and often the more powerful one, is the “salary sacrifice swap.” You redirect part of your pre-tax salary into super, taxed at just 15%2 rather than your marginal tax rate, and top up your take-home pay with tax-free TRIS pension payments (assuming you’re 60 or over, all payments are tax-free in your hands). This can help leave you with similar income and a noticeably larger super balance.
Two things worth knowing before you start:
- Earnings inside a TRIS account are still taxed at up to 15%, unlike the 0% enjoyed in full retirement phase unless you have $3 million or more held in the superannuation environment.
- The concessional contributions cap is $32,500 for the 2026–27 Financial Year, and salary sacrifice amounts count toward it. If certain requirements are met, you may be able to carry forward unused caps from the previous five years and make a larger contribution in a single year.
Where an adviser can help
TTR strategies look simple on paper and get complicated fast in practice. We help clients:
- Model whether the salary-sacrifice swap beats simply staying in accumulation.
- Coordinate TRIS with Centrelink assets and income tests, which treat it differently to accumulation super.
- Watch and manage total super balance against the $3 million Division 296 threshold before adding to it.
- Plan the eventual switch to a full account-based pension so nothing is left to guesswork.
If work still gives you purpose but your Fridays could use a little more breathing room, this might be worth a conversation.
The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional. We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.
[1] Retirement withdrawal – lump sum or income stream | Australian Taxation Office
[2] Concessional contributions are subject to additional tax of 15% if your income together with these contributions exceed $250,000.
