TTR Strategy Calculator

How the TTR strategy works

A Transition to Retirement (TTR) pension lets you draw an income from your super while still working, after you've reached preservation age (60 for everyone born on or after 1 July 1964). The tax benefit of the TTR strategy comes from two simultaneous moves:

1. Salary sacrifice more into super. Your concessional contributions are taxed at 15% inside super, not your marginal rate (which may be 30%, 37%, or 45%). For someone on the 37% bracket, that's a 22 percentage-point tax-rate saving on every dollar sacrificed up to the cap.
2. Replace the salary you've sacrificed with a tax-free TTR pension drawdown. If you're 60 or older, TTR pension payments are tax-free. So you keep the same gross income but funnel it through super, saving the tax differential.

The combined effect: the same dollar of income is taxed once at 15% (inside super) instead of once at your marginal rate. The tax saving is real, and on a salary near the 30%/37% bracket boundary it can be worth $3,000–$6,000 per year for the maximum allowable sacrifice.

Important rules

• You must be at or above preservation age to start a TTR pension. For anyone born on or after 1 July 1964, that's age 60.
• TTR pension drawdowns are capped at 10% per year of the pension account balance. Minimum is 4% (5% from age 65).
• TTR pension earnings inside super are taxed at 15% (changed in 2017 — used to be tax-free, which is why TTR has lost some of its appeal). A fully retired pension's earnings remain tax-free up to the Transfer Balance Cap.
• Concessional contributions cap applies. In FY 2025-26 the cap is $30,000 (rising to $32,500 from 1 July 2026 via AWOTE indexation). SG counts toward this cap, so the maximum salary sacrifice available = cap − SG. For someone on $120K salary, that's $30,000 − ($120,000 × 12%) = $30,000 − $14,400 = $15,600 maximum salary sacrifice in FY 25-26.
• Division 296 from 1 July 2026: if your Total Super Balance exceeds $3M, an extra 15% tax applies to earnings attributable to the balance above $3M. This dampens but doesn't eliminate the TTR strategy's benefit for high-balance members.

When the TTR strategy doesn't help

• Low marginal tax rate. If your marginal rate is already 16% (income $18,201–$45,000), the 15% contributions tax barely beats it. The TTR strategy is only meaningfully tax-effective at the 30% bracket and above.
• You've maxed your concessional cap from SG alone. Higher earners with bonuses + 12% SG can hit the cap from employer contributions alone, leaving no headroom for additional salary sacrifice.
• You're approaching $2.1M TBC. The TTR pension counts toward the Transfer Balance Cap when you convert it to a full account-based pension later. If you're already near $2.1M in super, starting a TTR may force a partial commutation of the pension balance back to accumulation phase at retirement.

Related

• Transition to Retirement (TTR) Strategies — full guide
• Super Contribution Caps — FY 25-26 + 26-27
• When can you access your super
• Contribution caps usage tracker
• How superannuation is taxed