Transition to Retirement (TTR) is a strategy that allows you to access some of your super as an income stream while you're still working, once you've reached preservation age (60 for most Australians). It can be used to reduce working hours without reducing income, or to boost your super balance through salary sacrifice strategies.
How TTR works
- You reach preservation age (60) but continue working
- You open a TTR pension (also called a transition to retirement income stream) with your super fund
- You draw a pension from the TTR account — minimum 4% and maximum 10% of the account balance per year
- Meanwhile, you can salary sacrifice a larger amount of your wages into super, replacing the income with TTR pension payments
The salary sacrifice + TTR strategy
This is the classic TTR play. Here's how it works for someone aged 60 earning $100,000 with $400,000 in super:
| Step | Without TTR | With TTR |
|---|---|---|
| Gross salary | $100,000 | $100,000 |
| Salary sacrifice into super | $0 | $20,000 |
| Taxable income | $100,000 | $80,000 |
| Income tax (approx.) | $24,497 | $18,067 |
| TTR pension income | $0 | $20,000 (tax-free at 60+) |
| Take-home pay | $75,503 | $81,933 |
| Extra per year | — | +$6,430 |
The double benefit: You reduce your marginal tax rate by salary sacrificing (saving income tax), while the TTR pension income is tax-free after age 60. The net effect is more money in your pocket and more flowing into super at a concessional 15% tax rate.
TTR pension rules
- Minimum drawdown: 4% of account balance per year (reduced to 2% in some COVID-era concessions, now reverted)
- Maximum drawdown: 10% of account balance per year (this cap does not apply once you fully retire)
- Tax on earnings: Investment earnings inside a TTR pension are taxed at 15%, same as accumulation phase. Once you fully retire and convert to an account-based pension, earnings become tax-free.
- Lump sum access: You cannot take lump sums from a TTR pension — only regular pension payments. Lump sum access unlocks when you meet a full condition of release (retire after preservation age, or turn 65).
When TTR makes sense
- You're 60+ and want to reduce working hours while maintaining income
- You're in a higher tax bracket and want to maximise the tax arbitrage via salary sacrifice
- You want to boost your super in the final years before retirement using carry-forward concessional caps
When TTR may not be worth it
- If your marginal tax rate is low (21% or below), the tax savings from salary sacrifice may be minimal
- If your super balance is small, drawing a TTR pension depletes it faster than it can grow
- If you're under 60, TTR pension payments from the taxable component attract some tax
Related guides
- When can you access your super
- Salary sacrifice into super
- Age pension and super
- Contribution caps 2025–26
Important information
The information on SuperFind is general in nature and does not take into account your personal financial situation, needs, or objectives. It is not personal financial advice. Before making any financial decisions about your superannuation, consider whether the information is appropriate for your circumstances and consider seeking advice from a licensed financial adviser. Super fund data including fees and performance returns shown on this site were current as of April 2026 — always verify figures on the fund's website. Past performance is not a reliable indicator of future performance. Data sourced from APRA, ATO, and individual fund disclosures. SuperFind is a DecisionLab publication.