Transition to Retirement (TTR) lets you start a super pension while you're still working, from your preservation age of 60. Paired with extra salary sacrifice, it becomes a tax play: you push more of your pay into super (taxed at 15% instead of your marginal rate) and draw a tax-free TTR pension to top your take-home back up. Your pay packet doesn't change — but more lands in super and the tax office takes less.
How the swap works
Say you sacrifice an extra $15,000 of salary. Instead of being taxed at your marginal rate (say 32% incl. Medicare = ~$4,800), it's taxed at super's flat 15% ($2,250). To keep your take-home whole, you draw a tax-free pension from super equal to the pay you gave up. The tax you saved — net of the 15% — simply stays in super.
Extra super = income tax saved on the slice − 15% contributions taxWhat it doesn't do
Since 2017 a TTR pension's earnings are taxed at 15%, the same as accumulation — so there's no earnings advantage, only the contribution swap. TTR pension payments must be between 4% and 10% of the pension balance each year. And the extra sacrifice is capped by your [concessional contributions cap](/learn/contribution-caps) (~$32,500/yr including the Super Guarantee).
It's most powerful in the years just before you retire, while you're still on a high marginal rate. Once you stop work, an ordinary account-based pension takes over.
How the planner models it
Add Transition to Retirement as a What-If lever (or set it up while you refine your plan). In each year you're 60+ and still working, the engine raises your concessional contribution, lowers your assessable income (so income tax and the 2% Medicare levy fall), and draws a tax-free TTR pension to hold your take-home exactly. In a couple, each partner still working past 60 can run their own. Open the flow-of-funds diagram below to see exactly where one year's money goes.