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Calculate the tax and cash flow benefit of a Transition to Retirement strategy in Australia. Model salary sacrifice and TTR pension drawdown to boost super while reducing tax.
A Transition to Retirement (TTR) strategy lets Australians aged 60 to 67 who are still working draw a pension from their superannuation while continuing to receive a salary. The tax benefit comes from combining a higher salary sacrifice contribution (taxed at 15% inside super) with pension income that is tax-free from age 60 onwards. This calculator models the two main effects: the tax saving from redirecting pre-tax salary into super, and the pension drawdown you receive from your TTR account. In many scenarios the strategy is cashflow-neutral or positive, meaning you can boost your super balance without reducing take-home pay.
You must have reached your superannuation preservation age, currently 60 for anyone born after 30 June 1964, and still be working. You do not need to reduce your hours or retire.
ATO rules require you to draw between 4% and 10% of your TTR pension account balance each year. The minimum percentage rises if your balance is in the pension phase and falls under the standard minimum drawdown rules.
From age 60, TTR pension payments are completely tax-free. If you are between your preservation age and 60, the taxable component of pension payments is taxed at your marginal rate with a 15% tax offset.
When you meet a full condition of release, typically retirement after 60, your TTR pension automatically converts to an account-based pension. At that point the investment earnings inside the account also become tax-free, which is an additional benefit.
Have more questions? These calculators provide estimates for educational purposes only. For personalized financial advice, consult with a qualified financial professional. See our disclaimer for more information.
A typical scenario using default values
{
"salary": 80000,
"sg_rate": 11,
"years": 30,
"return_rate": 7
}