Transition to retirement strategy

There's no reason to stop working if you're not ready and you don't need to be fully retired to access your super.

If you have reached your preservation age (i.e. 55 - 60 years, depending on when you were born) and have some super already, the 'Transition to Retirement' rules could help you boost your super savings significantly without cutting back on your lifestyle. It could even allow you to reduce your hours at work and supplement your reduced salary with payments from your super.

Who does this suit?

This strategy generally works best if you:

  • have reached your preservation age (i.e. 55 - 60 years, depending on when you were born);

  • are still working full-time; and

  • have some existing super.

How does it work?

The 'Transition to Retirement' rules allow people who have reached their preservation age (i.e. 55 - 60 years, depending on when you were born) to access their super while still working. Basically, they allow you to roll some or all of your current super into a 'non-commutable' income stream which pays you a regular income but does not allow you to withdraw a lump sum.

Now that you have more money coming in, the next part is to salary sacrifice your earnings into super. Because salary sacrifice uses before-tax dollars, you can actually contribute more to super than you withdraw, without missing the income.

For example, if you earn $100 and you are on the highest marginal tax rate (including Medicare levy), you would have to pay $46.50 to the government in tax. If you salary sacrifice the same amount, you only pay 15% tax on the contribution or $15. That's an extra $31.50 going into your super instead of to the government.

How to open a Transition to Retirement account

You can open a BT Super for Life - Transition to Retirement account online, or by calling 132 135.

With a BT Super for Life - Transition to Retirement account, you could:

  • Continue adding to your retirement savings with pre-tax dollars

    via salary sacrifice to your BT Super for Life - Savings account, while withdrawing from your existing super to supplement the reduced income. It can be a tax-effective way to boost your super without sacrificing your lifestyle.

  • Cut your working hours without sacrificing your lifestyle

    by accessing super to supplement your income. Using the two accounts, you can continue to work part-time while accessing your existing super from a BT Super for Life - Transition to Retirement account.


You get the best of both worlds - putting more money into super without feeling the pinch. And you'll feel even better later on when you retire and use your super to draw down a tax-effective income.

At any stage, salary sacrifice is one of the most effective strategies there is to boost your super savings. Because it uses pre-tax earnings, you lose less money to tax and get more in your pocket. Think about ways you can cut back in other areas to free-up some cash.

You can take advantage of other government incentives like co-contributions and spouse contributions to boost your super and earn tax offsets.

Check the PDS of your superannuation product to see if it offers a non-commutable income stream option.


How Anna increased her super payout by $80,425 without feeling the pinch.

Anna has reached her preservation age, has $500,000 in super and earns $100,000 p.a. She would like to boost her super without affecting her current lifestyle. She decides to sacrifice $50,000 of her income to super and commence a 'non-commutable' Account Based Pension (ABP), re-contributing any excess back to super.

Anna's flowchart


Net income year 1

Super balance after 10 years

Earn $100,000 p.a. and
receive Super Guarantee only.



Salary sacrifice $50K
(including Super Guarantee),
start a 'non-commutable' ABP
and re-contribute any excess
back to super.




  • Resident individual tax rates for 2008/09 inclusive of Medicare levy.

  • Individual has private health insurance.

  • Investment return of 7% p.a. before fees and taxes.

  • Salary indexed to 3% p.a.

  • 'Non-commutable' ABP not indexed.

  • By doing this, in 10 years Anna has increased her overall super benefit by 7% without sacrificing her lifestyle along the way.