A Transition to Retirement (TTR) pension lets you start drawing from your super after you reach preservation age (60 for everyone in 2025-26) without having to retire. The strategy is most often used in combination with salary sacrifice: you sacrifice extra into super (taxed at 15% in the fund instead of your marginal rate), then draw a TTR pension payment to keep your take-home pay roughly intact. Pension payments to anyone aged 60 or over from a taxed fund are tax-free.

The arithmetic only stacks up while your marginal tax rate is materially higher than 15%. The bigger the gap, the better TTR works. At a 30% marginal rate, every $1,000 sacrificed saves about $150 in tax; at 37% it's $220; at 45% it's $300. Concessional contributions (employer SG plus salary sacrifice) are capped at $30,000 per year for FY 2025–26 — anything above that is added back to your taxable income and taxed at your marginal rate.

TTR has two important constraints. First, while still in the TTR phase you can draw between the age-based minimum (4% under 65) and a hard 10% maximum each year. Second, earnings inside a TTR pension account are taxed at 15% — the same as accumulation phase. Only once you meet a full condition of release (retiring, turning 65, or ceasing employment after preservation age) does the account convert to a retirement-phase account-based pension where earnings become tax-free up to the Transfer Balance Cap.

This calculator estimates the per-year change in your take-home pay and net super inflow from a TTR strategy. For the long-run picture (super balance trajectory at retirement), pair it with the Superannuation Calculator and the Super Drawdown Calculator. For the broader retirement income picture, use the Age Pension Calculator.