Under the transition to retirement rules, if you have reached your preservation age, you may be able to reduce your working hours without reducing your income. You can do this by topping up your part-time income with a regular 'income stream' from your super savings.

Until recently, you could only access your super once you turned 65 or retired. This meant it was difficult to reduce your work hours and still maintain your standard of living.

With the new rules, you can withdraw some or all of your super over into a retirement income stream.

Then you can top up your reduced income by drawing on your super. However, you must be aware of the impact this can have on you and your circumstances. Some parts of this measure are complex to understand, set up and maintain.

We recommend you see a financial adviser, accountant or your tax agent to help you decide if this option is right for you.

Retirement income streams are a popular investment choice for retirees. Retirement income streams are simply investments that give you regular income payments through your retirement. This helps you manage your income and spending.


Your preservation age is generally the age you are allowed to access your super benefits when you stop working.
The table below shows your preservation age. Once you reach your preservation age, you can access your super benefits without retiring completely from the workforce.

Your preservation age depends on your date of birth

Tax on transition to retirement income streams

Transition to retirement income streams are taxed in the same way as other income streams.

That means:
If you have reached your preservation age and are less than 60 years old, the taxable part of your income stream will be taxed at your marginal tax rate.

If your income stream is paid from a taxed source, you will also receive a tax offset equal to 15% of the taxable part of the income stream, and once you turn 60, your super income from a taxed source will be tax-free.