Transition to Retirement Pension Calculator AU

What this calculator works out

This calculator estimates a transition to retirement (TTR) pension strategy for someone at preservation age (60+ for most people now). It works out:

• The annual drawdown at your chosen rate, capped to the 4-10% TTR range.
• Tax on TTR income — typically nil at age 60+, otherwise estimated below 60.
• The salary impact of any salary sacrifice into super.
• The net cash income combining take-home salary plus tax-free TTR drawdown.

It is built around the Moneysmart TTR guidance and the ATO TTR pages. It does not model fund earnings tax, Division 293, the pension transfer balance cap, or your specific super fund's product rules — those need a registered financial adviser.

The formula and where the rates come from

A TTR pension follows the standard account-based pension drawdown rules but with a maximum 10% cap on annual income payments. The minimum is 4% of the account balance at 1 July (pro-rata in the first year).

Tax on TTR income payments (FY 2025-26):

Age	Tax treatment
Under 60	Taxable component taxed at marginal rates with 15% offset
60 and over	Generally tax-free in the member's hands

Tax inside the fund: TTR investment earnings are taxed at up to 15% (same as accumulation). TTR is not in retirement-phase tax-exempt status until a full condition of release is met (retirement at 60+ or age 65).

Salary sacrifice mechanics (FY 2025-26):

• Sacrificed amount is taxed at 15% concessional contributions tax inside super instead of marginal rates.
• The concessional cap is $30,000 including employer Super Guarantee (currently 11.5%).
• Excess contributions are added back to assessable income — use carry-forward unused cap where eligible.
• Income above $250,000 attracts an extra 15% Division 293 tax on concessional contributions — see our Division 293 calculator.

The standard FY 2025-26 resident tax brackets (16% / 30% / 37% / 45%) plus a flat 2% Medicare levy are used to estimate the salary tax slice.

How to read the inputs

• Age — used to decide whether TTR income is tax-free (60+).
• TTR balance at 1 July — opening balance on which the 4-10% drawdown is calculated.
• Drawdown rate — your chosen rate as a fraction. Capped to 10%, floored to 4%.
• Salary — pre-sacrifice salary for the financial year.
• Salary sacrifice — annual sacrifice into super.

Worked examples

1. Age 60, $500k TTR balance, 4% drawdown, no salary work. Drawdown = $20,000, tax-free. Net cash income = $20,000. Useful as a partial-retirement income stream.

2. Age 60, $500k TTR balance, 4% drawdown, $80k salary, no sacrifice. Salary tax + Medicare ≈ $16,388. Take-home from salary ≈ $63,612. TTR adds $20,000 tax-free. Net cash income ≈ $83,612 for the year.

3. Age 60, $600k TTR balance, 5% drawdown, $120k salary, $15k sacrifice. Sacrifice goes into super at 15% contributions tax → net into super = $12,750. Taxable salary $105,000 → tax + Medicare ≈ $25,488. TTR drawdown $30,000 tax-free. Net cash income = ($105,000 − $25,488) + $30,000 = $109,512. Versus no-sacrifice baseline (salary $120k → tax + Medicare ≈ $30,488; TTR $30,000 → net $119,512), the sacrifice costs $10,000 of cash income but adds $12,750 to super pre-15%-CG-tax — typical net win is small but positive at the 30% marginal bracket.

4. Age 60, $400k TTR balance, 8% drawdown, $50k salary, $10k sacrifice. TTR draws $32,000 tax-free, salary $40,000 → tax + Medicare ≈ $4,348. Net cash income ≈ $67,652. Useful for someone scaling back to part-time and lifting income via TTR.

Common pitfalls

• Treating TTR earnings as tax-free. TTR fund earnings are still taxed at up to 15% inside the fund. Only the income payments to a 60+ member are tax-free.
• Drawing more than 10%. The 10% cap is a hard limit on a TTR. You cannot draw a lump sum or extra income above 10% until you meet a full condition of release.
• Forgetting the concessional cap. $30,000 includes employer SG. On a $120,000 salary at 11.5% SG, your employer is already contributing $13,800 — only $16,200 of headroom remains for sacrifice.
• Ignoring Division 293. Income above $250,000 (broadly) triggers an extra 15% tax on concessional contributions. The strategy can still be worthwhile but the maths shifts.
• Setting up TTR below 60. TTR was historically used at age 55-59 with a 15% offset on the taxed element. Most people at preservation age in FY 2025-26 are 60+, where the strategy is much cleaner.

Related calculators

• Salary Sacrifice Super Calculator — pre-tax super contribution modelling.
• Super Carry-Forward Cap Calculator — use unused concessional cap from prior years.
• Division 293 Extra Super Tax Calculator — extra 15% on concessional contributions for high earners.
• SAPTO & LITO Tax Offset Calculator (AU) — offsets that may apply at retirement age.
• First Home Super Saver Calculator (AU) — different super strategy for first-home buyers.

Sources:

• Moneysmart — Transition to retirement
• ATO — Transition to retirement
• ATO — Key superannuation rates and thresholds
• ATO — Tax rates – Australian residents
• Moneysmart — Account-based pensions