Four common questions about retirement
If you’re starting to think about winding back at work, we can help you understand the basics.
Tell me moreunlock your super before you retire
Did you know that you can access some of your super while you’re still working?
With a HESTA Transition to Retirement (TTR) strategy, you can top up your income while you
reduce your working hours or top up your super in the years leading up to retirement.
why a TTR strategy makes sense
It can help boost your super account balance while you continue working
It can pay you up to 10% of your super balance in a year
You pay only 15% tax on investment earnings (instead of your usual tax rate)*
It can help you reduce your working hours without reducing your income
It can help offset salary sacrifice contributions without reducing your take-home pay
You’re typically eligible to receive tax-free income stream payments from age 60
* Investment earnings in your TTR account are taxed at up to 15% within the fund, which may be lower than the rate on your other investments.
here's how it could work
1. Reduce your tax and boost your super before you retire
Example strategy
- Sharon starts a HESTA Transition to Retirement (TTR) Income Stream using $160,000 of her super balance (leaving $6,000 in super to retain her insurance).
- She draws down from her TTR. She’s allowed a maximum of $16,000 in her first year and then 10% of her account balance at 1 July each subsequent year.
- Sharon sets up salary sacrifice to contribute more money into her super account (before-tax) and uses her TTR payments to supplement her salary.
What does this mean for Sharon?
- Sharon must withdraw at least 4% of her account balance each year - this could force her to withdraw cash even if she doesn’t need it.
- However, Sharon can use the tax savings from her TTR account to boost her super.
- Her income stream payments are generally tax-free, and investment earnings will continue to be taxed at 15%.
Crunch the numbers
| Without a TTR strategy | Using a TTR strategy | |
|---|---|---|
| Salary - ordinary time earnings | $90,000 full time | $90,000 full time |
| Superannuation guarantee (SG) contributions | $10,800 | $10,800 |
| Before-tax contributions | $0 | $21,700 |
| Add income stream payments | Nil | $15,190 (100% tax-free over 60)^ |
| Tax paid on salary** | $17,520 | $11,010 |
| Net income | $72,480 | $72,480 |
| Contributions tax* | $1,620 | $4,875 |
| Total net impact on retirement savings for 1 financial year |
Nil | $3,255 |
Important note:
This case study is over a single financial year and excludes fees and costs, insurance fees and investment earnings.
The above example is an illustration only and is not guaranteed in any way. Actual outcomes may differ. Where salary is mentioned, this refers to ordinary time earnings (OTE). Assumes a 100% taxable component in the income stream and 12% SG. The before-tax contributions cap of $32,500 includes SG contributions, salary sacrifice and personal deductible contributions. In this example, Sharon's total before-tax contributions of $32,500 ($10,800 SG + $21,700 salary sacrifice) sit at the cap. Individual contribution limits will vary — seek advice before making additional before-tax contributions.
*Attracts 15% contributions tax.
** Tax paid on salary figures show income tax only and excludes the Medicare levy of 2% and tax offsets. These figures are used to illustrate the tax saving from salary sacrifice and do not represent total tax payable. Tax rates are for the 2026-27 financial year. Please visit ato.gov.au for current marginal tax rates.
^Accessing your benefit early without making additional contributions may mean your retirement benefits are depleted at an earlier age.
2. Reduce your work hours in the lead up to retirement
Example strategy
- Dom starts a HESTA Transition to Retirement (TTR) Income Stream using $196,000 of his super balance (leaving $6,000 in super to retain his insurance).
- He draws down from his income stream within allowable maximum range, which is a maximum of $19,600 in his first year and then 10% of his account balance at 1 July each subsequent year.
- Dom cuts back his work hours, but maintains his income by supplementing his reduced salary with his TTR payments.
What does this mean for Dom?
- Dom can reduce his working hours without reducing his income.
- Income stream payments are generally tax-free, and investment earnings will continue to be taxed at 15%.
Key considerations
By using his super to offset his reduced income, Dom will retire with less super.
Crunch the numbers
| Without a TTR strategy | Using a TTR strategy | |
|---|---|---|
| Salary - ordinary time earnings | $64,000 full time | $38,400 part time (3 days per week) |
| Superannuation guarantee (SG) contributions | $7,680 | $4,608 |
| Before-tax contributions | $0 | $0 |
| Add income stream payments | Nil | $18,910 (100% tax-free over 60)^ |
| Tax paid on salary** | $9,720 | $3,030 |
| Net income | $54,280 | $54,280 |
| Contributions tax* | $1,152 | $691.20 |
| Total net impact on retirement savings for 1 financial year |
Nil | -$21,521.20 |
Important note:
This case study is over a single financial year and excludes fees and costs, insurance fees and investment earnings. The example is an illustration only and is not guaranteed in any way. Actual outcomes may differ. Where salary is mentioned, this refers to ordinary time earnings (OTE). Assumes a 100% taxable component in the income stream and a 12% SG rate. Net impact has been calculated with consideration to the lower income reducing Dom’s SG contributions and the drawdown from the income stream.
The before-tax contributions cap of $32,500 includes superannuation guarantee (SG) contributions, salary sacrifice contributions and personal deductible (before-tax) contributions. Members who earn $37,000 or less for ‘adjusted taxable income’ are eligible for the low income superannuation tax offset (LISTO) of up to $500 against the contribution tax paid on before-tax contributions.
The above case studies have excluded potential LISTO benefits. Please visit ato.gov.au for current personal income tax rates and the definition of ‘adjusted taxable income’.
* Attracts 15% contributions tax.
** Tax paid on salary figures show income tax only and excludes the Medicare levy of 2% and tax offsets. These figures are used to illustrate the tax saving from salary sacrifice and do not represent total tax payable. Tax rates are for the 2026-27 financial year. Please visit ato.gov.au for current marginal tax rates.
^Accessing your benefit early without making additional contributions may mean your retirement benefits are depleted at an earlier age.
we're here to help
Our experts are ready and waiting to help you with your next chapter. It can start with a quick chat over the phone.
more support
Financial advice myths
Is the rumour mill holding you back from talking to a professional about your finances as you near retirement?
Get the facts
Path to retirement
In this information session, we’ll take you through what you can do today to help you get the best possible outcome for tomorrow.
Book your spot