About the Transition to Retirement Calculator
This transition to retirement (TTR) calculator models the classic Australian strategy for people aged 60 to 64 who are still working: move part of your super into a transition to retirement income stream, draw a tax-free pension of 4% to 10% of that balance each year, and salary sacrifice more of your pay into super, where it is taxed at 15% instead of your marginal rate.
Enter your salary, super balance, how much you move into the TTR pension, your drawdown rate and your salary sacrifice. The calculator shows the change in your take-home pay, the yearly tax saving, the salary sacrifice that would keep your take-home pay exactly the same, and a year-by-year projection of your super with and without the strategy up to age 65, when a TTR pension automatically moves into the tax-free retirement phase.
It uses 2026–27 resident income tax rates, the 2% Medicare levy, the low income tax offset, the 12% Super Guarantee and the $32,500 concessional cap. Salary sacrifice is limited to the cap room left after employer contributions. Earnings on a TTR pension are taxed like accumulation earnings, so the return you enter applies to both accounts; salary is held flat and the cash difference in take-home pay earns no interest.
With the default inputs, the yearly tax saving from the strategy is A$2,550.00. Change any value above to recalculate instantly.
How to use the transition to retirement calculator
- 1Enter your age (60 to 64), salary and employer contribution rate.
- 2Enter your total super and the amount you would move into a TTR pension.
- 3Choose a drawdown rate between 4% and 10%.
- 4Enter a salary sacrifice amount, or use the break-even figure to keep your pay unchanged.
- 5Compare the yearly tax saving and the projected super at 65 with and without the strategy.
Formula and method
Salary sacrifice X lowers your taxable income, so you avoid income tax and the Medicare levy at your marginal rate, but the fund deducts 15% contributions tax. The difference is the yearly tax saving. The TTR pension, paid tax-free from age 60, replaces the pay you gave up. The break-even sacrifice is found numerically so that the sacrificed salary, less the tax you avoid, equals the pension.
The projection runs to age 65. Each year the TTR account earns the return and pays a pension of d × its opening balance; the accumulation account earns the return and receives employer and sacrificed contributions after 15% tax. Without the strategy the whole balance stays in accumulation and receives only employer contributions. The wealth gain adds the cumulative change in take-home income (held as cash, no interest) to the difference in super balances.
- S
- Salary before tax
- X
- Salary sacrifice, capped at the concessional cap room
- d
- TTR drawdown rate
- Tax()
- 2026–27 income tax + 2% Medicare − low income tax offset
Worked examples
Age 60 on A$100,000, A$250,000 TTR at 8%, A$15,000 sacrifice
The employer pays A$12,000, leaving A$20,500 of cap room, so the full A$15,000 sacrifice fits. It avoids 32% tax and Medicare (A$4,800) but pays A$2,250 contributions tax: a A$2,550 saving. The tax-free pension of 8% × A$250,000 = A$20,000 more than replaces the A$10,200 of lost take-home pay, leaving A$9,800 extra cash this year. By 65 total super is about A$556,085 versus A$592,789 without the strategy, but with about A$45,079 of extra take-home cash the overall gain is about A$8,376.
Age 62 on A$150,000, sacrifice capped by the cap
Employer contributions are A$18,000, so only A$14,500 of the A$32,500 cap is left and the sacrifice is reduced to that. Taxable income falls from A$150,000 to A$135,500, saving 39% (37% tax + 2% Medicare) on A$14,500 — A$5,655 — less A$2,175 contributions tax, a A$3,480 yearly saving. With an A$18,000 pension, take-home income still rises by A$9,155, and over three years the strategy adds about A$9,398 of wealth.
Frequently asked questions
What is a transition to retirement pension?+
A transition to retirement income stream (TRIS) lets you draw a regular pension from your super once you reach preservation age while you keep working. You must withdraw at least 4% and no more than 10% of the account balance each financial year, and you cannot take lump sums until you meet a full condition of release.
Are TTR pension payments taxed?+
If you are 60 or older, TTR pension payments are tax-free and do not need to be included in your tax return. Investment earnings inside a TTR pension are still taxed at up to 15%, the same as accumulation accounts, until the pension enters the retirement phase.
When does a TTR pension become tax-free on earnings?+
A TTR pension moves into the retirement phase automatically when you turn 65, or earlier when you notify your fund that you have retired or met another condition of release. From then, earnings are tax-free and the balance counts towards your transfer balance cap ($2.1 million from 1 July 2026, up from $2 million in 2025–26).
Is the TTR strategy still worth it?+
Since 2017, TTR earnings are taxed at 15%, so the benefit comes almost entirely from salary sacrificing at 15% instead of your marginal rate. At incomes above about $45,000 (32% marginal rate including Medicare) the saving is meaningful; at lower incomes or when employer contributions already fill your cap there is little to gain.
What is my preservation age?+
Preservation age is 60 for anyone born after 30 June 1964. People born earlier had preservation ages from 55 to 59, but they have all reached 60 by now, so in practice TTR starts from 60.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.
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