If you’re looking to build up your super more quickly in the run up to retirement, then a transition to retirement (TTR) strategy could be for you. By reducing the amount of tax you pay, you can contribute more to super without reducing your current income.

If you have reached your preservation age, you can transfer some or all of your super into an Income account. You can then salary sacrifice a larger portion of your pre-tax pay into super and make up the difference in your take-home pay with a tax effective income from your Income account.

By making sure you’ve got more going into your super than coming out, your super gets a boost – plus you can convert some of the money you were paying in tax into super contributions.

Tax strategies

Andy is 60 and earns $80,000 a year. He’s used the Retirement Income Calculator, and is interested in growing his super balance as much as he can before he retires in five years.

After speaking with a financial adviser, Andy decides to:

  1. Transfer most of his super into a new Income account. This saves money because he no longer pays tax on his investment earnings
  2. Salary-sacrifice a larger amount into super. This reduces his income tax and his take-home pay.
  3. Top up his salary by withdrawing between 4% and 10% of his Income account balance each year. Because Andy is over 60, there’s no tax payable on income payments from his Income account.

By using a TTR strategy to increase his salary sacrifice into super, Andy’s able to significantly increase his benefit at retirement without decreasing his take-home pay1.

 Tax strategies


Before TTR strategy After TTR strategy
Salary $80,000 $80,000
Salary sacrifice into super $4,000 $19,000
Pension Income $9,740
Tax payable $17,767 $12,507
Take home pay $58,233 $58,233
Total super contributions (net of tax) $12,070 $24,820
Super balance at the end of 5 years $291,937 $320,339


1. The same employer superannuation contributions for Andy's current situation and for his TTR strategy.
2. Investment returns based on earning of 6.5% and an average tax rate of 15% on super fund earnings. Just remember though that past performance is not a reliable indicator of future performance.
3. As Andy is over 60 at 30 June 2015, his maximum concessional super contribution is $35,000 for 2014/2015.
4. Andy's concessional contributions are taxed at 15% when they are received by his super fund.
5. Andy's investment returns in his Income account are tax free.
6. The amount of TTR pension that can be withdrawn each year by Andy must be between the minimum 4% and maximum 10% of the account balance.
7. The lower income tax offset has been applied to income tax payable.
8. A 4% annual salary increase has been applied.
9. Tax payable on personal income is based on tax rates for 2014/2015.

There is a limit to the amount you can tax-effectively contribute to super. Read more about concessional contributions limits.

The rules about TTR strategies can be complicated, so it's important to get professional advice. Call QInvest for more information.2


1. This case study is provided by QInvest for illustrative purposes only, so you shouldn’t rely on it as personal, legal or taxation advice, nor does it take the place of such advice.
2. Advice fees apply.