Transition to Retirement Calculator
See how a TTR strategy combining salary sacrifice and a pension drawdown can increase your take-home pay and boost your super.
How a Transition to Retirement Strategy Works
A TTR strategy lets you access your superannuation as a pension income stream once you reach your preservation age, while continuing to work full-time. By combining salary sacrifice (to reduce income tax) with TTR pension payments (to replace the sacrificed income), you can maintain your take-home pay while paying less tax overall.
The Classic TTR Strategy
- Salary sacrifice a portion of your salary into super — this reduces your taxable income and is taxed at only 15%
- Start a TTR pension drawing the same amount from your existing super balance
- Your take-home pay stays roughly the same, but your tax bill is lower
- The net result: more money in super after tax, with no reduction in lifestyle
Age 60+ Tax-Free Advantage
From age 60, TTR pension payments are entirely tax-free. This makes the strategy most powerful for those aged 60–67, as the pension income is not taxed at all. Before age 60 (but at or above preservation age 55), a 15% tax offset applies to the taxable component of pension payments.
TTR Pension Limits
You can withdraw between 4% (minimum) and 10% (maximum) of your TTR account balance per year. For a $400,000 balance, this means between $16,000 and $40,000 per year. Note that since 2017, TTR pension earnings are taxed at 15% (not tax-free as they were previously), which reduces the strategy's benefit slightly.
When TTR Makes Sense
TTR is most effective when you are aged 60+ with a significant super balance, are on the 37% or 45% marginal tax rate, and plan to continue working for several more years. It is less effective for lower income earners or those on the 19% rate where the tax differential is smaller.