Income from super

Making the most of your super

Superannuation is a major source of retirement income. Find out how you can grow your super so you can make it last as long as possible.

The benefits of super

One major benefit of super is that most people pay less tax than if they had invested the money outside super. You can also keep your money in your super fund indefinitely and take it out as you need it. The downside of super is that your money is generally locked away until you are between 55 and 60.

How to grow your super before you retire

If you are thinking about retiring in the next few years, here are some things you can do to boost your super money.

  • Consolidate your super - Merge your super money into a single fund if you have more than one. See consolidating super funds for more information.
  • Find your lost super - Track down your 'lost' super by registering for the Australian Taxation Office's online services via myGov. See keeping track and lost super for more information.
  • Use the retirement planner - See what income you are likely to get from your super and get some guidance on what you can do now to improve your retirement income.

Find out if it's the right time for you to retire.

Retirement planner

How to access your super

There are a number of ways you can access your super. Choose one or a combination of options. Keep in mind there are tax implications associated with each option. See the ATO for details on how your super payout is taxed or seek financial advice.

Take some money as a lump sum

You can take a lump sum payment from your super fund when you retire. You pay low (or no) tax on lump sums up to $205,000 or if you are age 60 or over. This money can be put into a high-interest bearing account (see savings accounts and term deposits) or invested. See investments outside super for more information.

The drawback of taking your money out of super is that you may have to pay tax on your investment earnings.

Draw down a regular income

You can keep your money within the superannuation system and transfer it from an accumulation fund to an account-based pension. This option gives you the flexibility to vary the amount you receive each year. You won't pay tax on investment earnings, however, the government has introduced a transfer balance cap that limits the amount of super that can be transferred into a retirement income stream. See  account-based pensions for more information.

You can do this when you reach your preservation age and retire. Your preservation age is the age you can access your super. This is based on your date of birth and is different to the age you'll be eligible for the Age Pension.

Find out when you can get your super and the Age Pension.

Super and pension age calculator

Purchase an annuity

You can buy an annuity from a super fund or life insurance company using your super payout or other savings. This option gives you a guaranteed income for a defined period of time or for the rest of your life, regardless of market performance. However, annuities are not as flexible and generally pay less than account-based pensions. See annuities for more information.

Transition to retirement - access your super and keep working

If you're not quite ready to give up your job when you reach preservation age, you can continue to work and draw some money from your super. You'll pay less tax on your super income and can keep contributing to your super. See transition to retirement for more information.

As each person's circumstances are unique, we recommend you seek financial advice before withdrawing your super. Otherwise you may not be able to access better options or have to pay a tax bill. With careful thought and proper planning, you can stretch your super money.

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Last updated: 04 Feb 2019