Income from super
Making the most of your super
Superannuation is a major source of retirement income. Explore
how you can grow your super and make it last as long as
The benefits of super
The main benefit of super is that most
people pay less tax than if they had invested outside super. You
can also keep your money in the super fund indefinitely and take
out money as you need it. The downside of super is that your money
is generally locked away until you are between 55 and 60.
Super changes in 2017
Changes to super contribution limits and tax concessions start
on 1 July 2017. Information about the super changes can be found on
the Australian Tax Office (ATO) website.
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.
- Use our retirement planner to see what income you are likely to
get from your super. It also offers advice on what you can do now
to improve your retirement income.
- Merge your super money into a single fund if you have more than
one. See consolidating super funds for
- Track down your 'lost' super using the Australian Taxation
Office's (ATO's) SuperSeeker tool. See keeping track and lost
super for more information.
Find out if it's the right time for you to
Making the most of your super
There are a number of ways you can use 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
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 $195,000 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
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. There are also tax benefits as
you pay no tax on investment earnings. See account-based
pensions for more information.
You can do this when you retire or reach your preservation age.
Your preservation age is the age at which you can access your
super. This is based on your date of birth and is diferent to the
age at which you'll be eligible for the Age pension.
Find out when you can get your super and the Age
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.
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
As each person's circumstances are unique, we
recommend you seek financial advice before withdrawing
your super. Otherwise you may close off better options or face a
nasty tax surprise. With careful thought and proper planning, you
can stretch out your super money.
Last updated: 30 Jan 2017