How are transition to retirement income streams taxed?

If you decide to set up a transition to retirement income stream, your income will be taxed in the following way:

• Investment earnings are taxed at a concessional rate of up to 15%
• If you're aged 60 or over, you won’t pay tax on your income payments
• If you're aged between Commonwealth preservation age¹ and 59 part of your income stream may be tax-free, the rest will be taxed at your marginal tax rate (plus Medicare Levy of 2%) and you may receive a tax offset of up to 15%

1 Your Commonwealth preservation age depends on your date of birth. For more information visit the Commonwealth preservation age page.