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Back to Retirement options with Rest

What is a Transition to Retirement strategy?

Are you 60 or over and still working? A Transition to Retirement (TTR) strategy lets you access some of your super as tax-free pension payments.

It can be a smart way to boost your super before retirement by salary sacrificing some of your before-tax salary/wages and paying less tax. Or you can use the pension payments to top up your income while enjoying a shorter work week.

Set up your TTR strategy with a Rest Pension account.  

Transition to retirement rules

  • You must be at least 60 to use a TTR strategy.
  • Full-time, part-time and casual work are all okay. There’s no minimum number of hours that you need to work.
  • The government sets a minimum pension payment amount that you must withdraw from your account each financial year. This amount is based on your age and your account balance (your opening balance in your first year, then your 1 July balance in the following years). For example, if you’re 60-64 you must withdraw at least 4% of your account balance each financial year.
  • You need to keep your super account open (with a balance of at least $6,000) so you can continue getting super contributions from your employer.

60–64 years old?

We’ll set up a Rest Pension – Transition to Retirement account for your TTR strategy.

You can’t withdraw more than 10% of your account balance each financial year.

Your Transition to Retirement account will automatically convert to a Rest Pension – Retirement account once you turn 65, but you can continue using a TTR strategy while you’re still working.

65 or over?

We’ll set up a Rest Pension – Retirement account for your TTR strategy.

There’s no maximum limit to how much you can withdraw from your account each financial year.

Two ways to use a TTR strategy

piggy bank icon

Boost your super balance and save tax using salary sacrificing.  

work dollar suitcase icon

Reduce your working hours and use the pension payments to top up your income.  

1. Using a TTR strategy to help boost your super balance

1

Use some of your super to open a Rest Pension account

Keep your super account open to continue receiving contributions from your employer.
2

Make salary sacrifice contributions to your super account

Salary sacrifice contributions are taxed at 15% by your super fund, instead of income tax being deducted from this money by your employer. This may help you pay less tax.1
3

Receive tax-free pension payments from your Rest Pension account

Use these pension payments to replace some or all of the income you salary sacrifice into your super.
4

The extra contributions help your super grow

You’ll contribute more to super thanks to the tax benefit.

1. Salary sacrifice contributions are generally taxed at 15%. You may have a higher tax rate if your combined income and salary sacrifice contributions are more than $250,000 in a financial year. Tax rates for income from your employer vary depending on your income  (see current income tax rates).

Meet Jerry

Jerry wants to boost his super before he retires. He’s just turned 60 and has $176,000 in super.

Jerry decides to salary sacrifice $23,916 each year into his super. He withdraws $17,000 each year from a Rest Pension account.

With a TTR strategy, Jerry can reduce his annual personal tax bill by $6,916 and increase his super balance across his accounts by $3,396 after one year.  

Jerry's details

Jerry’s annual cashflow

  Existing With a Rest Pension TTR account
Salary $60,000 $60,000
Less Salary Sacrifice   -$23,916
Taxable Income $60,000 $36,084
Less Tax (total tax liability)* -$9,620 -$2,704
Rest Pension - pension payments   $17,000
Net income received $50,380 $50,380

* Income tax plus Medicare levy, less Low Income Tax Offset (LITO)

Jerry’s super balances

  Existing With a Rest Pension account
Account Super Super Pension
Starting balance $176,000 $6,000 $170,000
Super Guarantee e.g. Employer contributions $7,200 $7,200  
Salary Sacrifice   $23,916  
Less Rest Pension – pension payments     -$17,000 
Investment earnings  $8,727 $880 $7,287
Less Contributions and earnings tax -$1,778 -$4,738 -$634
Total end of year balance (Super + Pension) $190,149 $193,545

Jerry has reduced his annual personal tax bill by $6,916 and increased his super balance across his accounts by $3,396 after one year.

Assumptions

  • Super Guarantee contributions - 12%
  • Assumed net return for Rest Super and Rest Pension accounts of 4.89%, Tax on earnings - 8%
  • Fees are not taken into account in this case study.

*All case studies are illustrative only and are not an estimate of amounts you'll receive or fees and costs you'll incur. The information contained in the case studies is current as at 1 July 2026.  

2. Using a TTR strategy to help reduce your working hours

1

Use some of your super to open a Rest Pension account

Keep your super account open to continue receiving contributions from your employer.
2

Reduce your work hours

Use the extra time to start setting up the lifestyle you want to enjoy in retirement.
3

Make salary sacrifice contributions to your super account

Salary sacrifice contributions are taxed at 15% instead of your income tax rate, which may help you pay less tax.1
4

Receive tax-free pension payments from your Rest Pension account

Use these payments to top up your income so you can maintain a similar take-home pay even though you’re working less and salary sacrificing.
5

Ease into retirement with a lighter workload

Keep in mind that this strategy may reduce your retirement savings if your pension payments are higher than your super contributions.

1. Salary sacrifice contributions are generally taxed at 15%. You may have a higher tax rate if your combined income and salary sacrifice contributions are more than $250,000 in a financial year. Tax rates for income from your employer vary depending on your income (see current income tax rates)

Meet Elaine

She wants to cut back her work week.

Elaine has just turned 60 and has $160,000 in super. She’d like to reduce her hours but doesn’t want it to impact her take-home pay. By supplementing her income with money from her super using a Rest Pension, Elaine could reduce her tax burden while maintaining her take home pay. But this will impact the overall super Elaine has when she fully retires.  

Elaine's options

  Option 1 -
Work five days		 Option 2 -
Work four days		 Option 3 -
Work four days and
start a Rest Pension
Salary $50,000 $40,000 $40,000
Less Salary Sacrifice     -$10,546
Taxable Income $50,000 $40,000 $29,454
Less Tax (total tax liability)* -$6,270 -$3,495 -$1,124
Rest Pension - pension payments     $15,400
Net Income $43,730 $36,505 $43,730
Super & Pension Balance after 5 years $229,564 $226,024 $197,874

* Income tax plus Medicare levy, less Low Income Tax Offset (LITO)


Assumptions

  • Inflation or CPI (Consumer Price Index) – 3.2%
  • Salary is indexed to AWOTE (Average weekly ordinary time earnings) - 3.2%
  • Super Guarantee contributions - 12%
  • Tax rates (2026-27) are not indexed
  • Assumed net return for Rest Super and Pension accounts - 4.89%, Tax on earnings - 8%
  • Fees are not taken into account in this case study.

*All case studies are illustrative only and are not an estimate of amounts you'll receive or fees and costs you'll incur. The information contained in the case studies is current as at 1 July 2026.

Watch how Rest Pension can power your retirement

Opening a Rest Pension account
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How a TTR strategy impacts Centrelink payments

Some government benefits may be impacted by a TTR strategy. For example, if you or your partner are receiving Age Pension or carer payments from the government.

Our Rest Advisers can help you look into any possible impacts before you open an account.  

Ready to start your TTR strategy with a Rest Pension account?

 

Join now
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Need to talk it over?

Our Super Specialists can answer your questions and connect you with a Rest Adviser if needed.

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