What is a Transition to Retirement Income Stream (TRIS)?
A Transition to Retirement Income Stream (TRIS) allows Australians who’ve reached their preservation age (currently 60 for most) to access part of their superannuation while still working.
It’s a smart way to ease into retirement, whether full-time or part-time without giving up your job just yet.
A Quick Look Back: Why TRIS Exists
Introduced in 2005, TRIS was designed to support older Australians in gradually reducing their work hours while supplementing their income with superannuation payments.
Before TRIS, accessing your super meant you had to fully retire or meet specific, stricter conditions of release.
You’re eligible to start a TRIS once you hit your preservation age, which depends on your date of birth:
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
TRIS Withdrawal Rules
Each financial year, you must withdraw a minimum of 4% and no more than 10% of your TRIS account balance. These limits are recalculated every 1 July based on your account balance.
Here are the minimum pension factors by 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%
Important: If you start your TRIS mid-year (e.g. January), the minimum drawdown is pro-rated based on the number of days left in the financial year. But the 10% maximum is not pro-rated—you can still withdraw the full 10% if you wish.
What Happens If You Don’t Withdraw the Minimum?
The ATO has tightened compliance. Failing to meet the minimum 4% withdrawal hasserious consequences:
Your pension is deemed to have ceased from 1 July (not just when the shortfall is noticed).
Your TRIS balance reverts to the accumulation phase, and earnings become taxable.
Any existing accumulation and pension accounts may merge, disrupting estate planning and tax strategies.
You can’t restart the pension until the shortfall is corrected, which can take 13–22 months.
Is TRIS Compulsory for SMSFs?
No. An SMSF is not required to offer TRIS to its members. However, if the trust deed allows it, the fund can pay a TRIS. If your deed doesn’t currently permit TRIS, you can update your deed to allow for it.
How TRIS Works (Step-by-Step):
You reach preservation age.
You transfer part of your super into a TRIS account (no lump sum withdrawal).
You start receiving regular income (between 4% and 10% annually).
Earnings inside a TRIS are taxed:
Non-retirement phase: Taxed at up to 15%.
Retirement phase: Tax-free (eligible for ECPI).
Once you fully retire, turn 65, or meet another condition of release, your TRIS automatically becomes a standard account-based pension, withdrawal limits and tax restrictions are lifted.
When Does a TRIS Enter the “Retirement Phase”?
Your TRIS enters the retirement phase (and becomes tax-free) when you meet any of these conditions:
Turn 65
Retire after reaching preservation age (must notify your fund)
Suffer permanent incapacity or are diagnosed with a terminal illness
Once in retirement phase:
Withdrawal cap (10%) is removed
TRIS becomes a full account-based pension
Earnings on the supporting assets become tax-free (ECPI applies)
How Are Taxable and Tax-Free Components Calculated?
When you move funds into a TRIS, the tax-free and taxable proportions are carried over from your existing super balance automatically.
Example:
You have $200,000 in super:
$60,000 (30%) tax-free
$140,000 (70%) taxable
If you move $100,000 into your TRIS:
$30,000 will be tax-free (30%)
$70,000 will be taxable (70%)
You can’t choose the split—it’s set proportionally.
From 1 July 2017, the rules got tighter:
Retirement phase TRIS : Earnings Tax Treatment= Tax-free (ECPI applies), Counts Toward $2M Transfer Cap?= Yes
Non-retirement phase TRIS: Earnings Tax Treatment= Taxed at 15% (no ECPI), Counts Towards $2M Transfer Cap?= No (until retirement condition met)
Final Thoughts
A TRIS is a powerful strategy for phasing into retirement, accessing income early, and managing tax effectively (especially when paired with salary sacrifice or personal contributions) but it comes with strict rules, annual withdrawal requirements, and tax implications—so planning ahead is key.
Need help structuring a TRIS for your retirement strategy or SMSF? Let’s chat.
General advice disclaimer / General Advice warning: the information in this article is general in nature, it is not advice specific to your needs. If you want to act upon the information in this article then you should seek advice from a qualified professional. VJC Wealth accepts no liability to any party for acting from this information unless they have sought advice in a formal engagement for this purpose
