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Transition to Retirement (TRIS) with Your SMSF

A Transition to Retirement Income Stream (TRIS) allows Self-Managed Super Fund (SMSF) members who have reached their preservation age to access part of their superannuation while still working.


Whether you’re looking to cut back on work hours, boost your income, or reduce your tax liability, a TRIS can help you transition smoothly into retirement while maintaining investment growth in your SMSF.


At HelloLedger, we guide SMSF trustees through the setup, compliance, and reporting requirements of starting a TRIS, ensuring full ATO compliance.

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What Is a Transition to Retirement Income Stream (TRIS)?

A TRIS is a type of pension income stream that allows members to access their superannuation while they are still working, provided they have reached their preservation age.

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Key Features of a TRIS:

  • Payments are flexible, but minimum drawdown rates apply.

  • You cannot withdraw a lump sum—payments must be made as regular income streams.

  • Earnings within the fund remain taxed at 15% until the member satisfies a full condition of release.

 

Once the member retires or turns 65, the TRIS can convert to an account-based pension, with tax-free earnings.

Eligibility for a TRIS

To start a TRIS, you must:

  • Have reached your preservation age (between 55 and 60, depending on your birthdate).

  • Continue working in full-time, part-time, or casual employment.

​Date of Birth                            Preservation Age

Before 1 July 1960                    55

1 July 1960 – 30 June 1961      56

1 July 1961 – 30 June 1962      57

1 July 1962 – 30 June 1963     58

1 July 1963 – 30 June 1964     59

After 1 July 1964                      60

Benefits of a TRIS

1. Supplement Your Income

  • Access part of your super balance to replace reduced work hours or fund lifestyle expenses.
     

2. Reduce Tax While Boosting Super

  • Combine a TRIS with salary sacrifice contributions to reduce your taxable income while maintaining contributions to grow your retirement savings.
     

3. Maintain Investment Growth

  • Your SMSF assets remain invested, allowing them to potentially grow while you draw an income stream.
     

4. Flexible Retirement Planning

  • Provides flexibility to reduce working hours without giving up a steady income.

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Rules and Compliance Requirements

1. Minimum Pension Payments•A minimum amount must be drawn each year based on your age:

 

Age                       Minimum Drawdown Rate

Under 65              4%

65–74                    5%

75–79                    6%

80–84                    7%

85–89                    9%

90–94                   11%

95+                        14%
 

2. Maximum Withdrawal Limit

  • The maximum withdrawal limit is 10% of your account balance per financial year while you are still working.

  • Once you retire or turn 65, this restriction is removed, and the TRIS converts to an account-based pension.
     

3. Tax Treatment of Payments

  • Under 60: Payments are taxed at marginal tax rates, with a 15% tax offset.

  • 60 and Over: Payments are tax-free.
     

4. Earnings Taxed in the TRIS Phase

  • Earnings within the SMSF remain taxed at 15% in the TRIS phase.

  • Once the TRIS converts to a retirement-phase pension, earnings become tax-free.

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Transition to Retirement (TRIS) FAQs

  • Can I start a TRIS if I’m still working full-time?

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  • Yes, you can start a TRIS as long as you’ve reached your preservation age, even if you are working full-time.

  • How much can I withdraw each year under a TRIS?

     

  • You must withdraw at least the minimum drawdown rate (4% for under 65) but cannot exceed 10% of your account balance in a financial year.

Can I salary sacrifice while receiving a TRIS?

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Yes, combining a TRIS with salary sacrifice contributions can help you reduce taxable income while boosting your retirement savings.

Can HelloLedger help set up my TRIS?

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Yes, HelloLedger can:

  • - Assist with TRIS setup and compliance.

  • - Prepare documentation and manage ATO reporting.

  • - Ensure you meet all minimum payment requirements and audit obligations.

  • Can I withdraw a lump sum under a TRIS?

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  • No, a TRIS only allows regular income payments. Lump sum withdrawals are not permitted until you meet a full condition of release (e.g., retirement or turning 65).

What happens to my TRIS when I retire?

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Once you retire or turn 65, your TRIS automatically converts to an account-based pension. At that point, earnings within the SMSF become tax-free.

  • Are payments from a TRIS taxed?

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  • Under 60: Payments are taxed at your marginal rate, with a 15% offset.

  • 60 and Over: Payments are tax-free.

Get in Touch

Ready to take control of your retirement savings with a Self Managed Super Fund? 

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Contact HelloLedger today for expert SMSF services. Together, we’ll pave the way for a secure and prosperous retirement. Say Hello to strategic superannuation management and Goodbye to worry!

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