Transition to retirement: what does it mean?
Transition to retirement is for people who’ve reached their preservation age but aren’t yet ready to retire.
Here’s how it works: once you reach your preservation age (see below), you can open a pension account alongside your regular super account. You’ll receive your pension income payments directly to your bank account.
Work less for the same income
If you want to ease into retirement by reducing your hours and working part-time, you can maintain your lifestyle by using some of your superannuation to top up your income. Depending on your age, you’ll also pay less tax on the pension payments you draw from your super. If you’re 60 or over, the pension payments you receive will be tax free when you receive them (if paid from a taxed fund).
You should consider your long term retirement needs before you decide to start your transition to retirement pension. Remember the earlier you access your super, the less you may have for retirement in the long term.
When can you start retirement?
You can start a transition to retirement pension as soon as you reach your preservation age: