grow your super while saving tax

Find out how you can make your money work for you


Once you reach your preservation age — that’s the age you can access your super - you can open a HESTA Transition to Retirement (TTR) Income Stream account alongside your regular super account.

These two accounts then work together and may reduce the overall tax you pay while helping boost your super savings.


How tax works with super

Throughout our working lives, we all pay tax. We pay it at the marginal tax rate which means you get charged a higher tax rate if you earn a higher income. Super contributions and investment returns are not taxed at your marginal tax rate, it is taxed at 15%.


How Transition to Retirement (TTR) works

If you’re over your preservation age and still working, a TTR strategy gives you options. It can help you to boost your savings before you retire, which we’ll cover below. It can also help you to maintain your income while winding back on work, which you can find out more about here. To open a HESTA Income Stream account you’ll need a minimum balance of $50,000.

Check out the table below to figure out your preservation age:

Date of birth Preservation age
Before 01/07/60 55
01/07/60 - 30/06/61 56
01/07/61 - 30/06/62 57
01/07/62 - 30/06/63 58
01/07/63 - 30/06/64 59
After 30/06/64 60


How can a Transition to Retirement (TTR) strategy help boost your super?

In the lead up to retirement, a TTR strategy can help you boost your super while also paying less‌ tax. You can do this by adding to your super from your before-tax salary. You can do this using salary sacrifice, or if you’re self-employed you can make personal deductible super contributions.

How does this save you tax?

  • You only pay 15% tax when you salary sacrifice contributions into super, which is likely to be less than your marginal tax rate – that’s the percentage rate of tax you pay on your income.
  • Investment earnings are also taxed at just 15%, while outside of super anything you earn on investments is taxed at your marginal tax rate. Once you turn 65 or notify us you’ve met a condition of release, your TTR investment earnings will enter the retirement phase and your investment earnings are tax free.


How does tax work with income stream payments?

Over 60

If you’re 60 or over, all of your income stream payments are tax free. And that also includes any lump sums you might decide to withdraw. However, in a TTR there is a maximum of 10% of your account balance that you can withdraw each year.

Under 60

If you’re under 60, part of your income stream is taxed, and part of it isn’t. The part that is taxed needs to be included as assessable income in your tax return, which is taxed at a marginal rate.

If you’ve reached preservation age, you’ll get the benefit of a 15% tax rebate, for the tax you paid in super.

You can find out more information about how tax is treated with your income stream in the Income Stream Product Disclosure Statement.


Portrait of senior woman in her garden



Case study: Althea

Althea, who has reached preservation age but is still under 60, has chosen to receive an income of $7,000 from her HESTA Income Stream this year. Her tax-free portion is 10% so she will receive $700 tax free

Althea will only declare $6,300 ($7,000 less 10%) of this income for tax purposes. She is also entitled to a tax offset of 15% which equates to $945 tax free (15% of $6,300).

In total, Althea receives $7,000 from her HESTA Income Stream but only pays tax on $5,355.

This example is provided for illustration purposes only.

Need help?

We understand that setting up your Transition to Retirement Income Stream can be complicated, that’s why we’re here to help you through it. It’s all part of the service for HESTA members.