Transition to Retirement (TTR) Income Stream

A 'transition to retirement pension' is an account-based income stream that you can commence once you have reached preservation age (currently between 55 and 60, depending on when you were born) but you do not need to have ceased employment.

Although it works in a similar way to a normal account-based income stream (as previously outlined), three additional conditions apply:

• you generally cannot make lump sum withdrawals;
• earnings do not enjoy the tax-free status of the pension phase but instead are taxed at 15%; and
• your annual pension income withdrawn must be between 4% and 10% of the account balance each year.

Please note: These conditions apply until another condition of release is met, such as reaching age 65. At this time, your TTR pension moves into the normal pension phase. This means that earnings on investments held within the pension are taxed at 0% rather than up to 15%. The account balance is also assessed against your Transfer Balance Cap.