The Complete Guide to Superannuation in Retirement
Once you stop working, superannuation shifts from something you contribute to, into something you draw an income from. That shift brings a different set of decisions — when you can access it, how much to draw each year, how it interacts with the Age Pension, and what happens to it after you're gone. This guide is the starting point for that stage.
When you can actually access your super
You generally need to reach your preservation age and meet a condition of release (most commonly retirement) before you can access your super, though the transition to retirement rules allow earlier partial access in some circumstances. See Preservation Age by Birth Year to find your own preservation age, and Transition to Retirement (TTR) if you're considering reducing your hours before fully retiring.
Turning your balance into income
Most retirees convert some or all of their super into an account-based pension, which pays a regular income stream drawn from the invested balance, generally with more favourable tax treatment than the accumulation phase — see Account-Based Pensions Explained. There's also a choice between taking some or all of your balance as a lump sum versus an income stream, each with different implications — see Lump Sum or Income Stream?
Working out how much you'll actually need
A common approach is to start with the annual income a retiree might want and consider what balance could support that for as long as it's needed — see How Much Super Do You Need to Retire Comfortably? and Retirement Drawdown Strategies for how to think about drawdown rates specifically. Turning this into an actual figure for your own situation is generally best done using your fund's retirement calculator or with a licensed financial adviser.
How super interacts with the Age Pension
For many retirees, the Age Pension and superannuation work together rather than one replacing the other — but super counts toward the assets and income tests that determine how much Age Pension (if any) you're entitled to. See Super and the Age Pension for how the tests work.
Contributions don't necessarily stop at retirement
If you're still working part-time, downsizing your home, or have other capital to add, there are still ways to contribute to super later in life, subject to specific rules — see Downsizer Contributions Explained, Contribution Caps After 60, and Working Part-Time After 60.
Planning beyond your own retirement
Superannuation doesn't automatically form part of your estate the way other assets do — who receives it, and how it's taxed, depends on binding nominations and the relationship of the beneficiary to you. See Super Death Benefits: Nominating Your Beneficiaries.
A few other things worth knowing
If aged care is on the horizon for you or a family member, super often forms a key part of funding it — see Super and Aged Care Costs. If you're managing your own SMSF into retirement, the compliance requirements shift once you move into pension phase — see SMSF in Pension Phase. And withdrawals themselves have their own tax treatment depending on your age and the type of benefit — see Tax on Superannuation Withdrawals After Retirement.
Frequently asked questions
Do I have to take my super as a pension, or can I withdraw it all at once?
In most cases you can choose — a full lump sum, a full account-based pension, or a combination of both, depending on your fund and personal circumstances.
Does my super run out if I live longer than expected?
An account-based pension can be drawn down to zero if withdrawals exceed investment returns over a long enough retirement — see Retirement Drawdown Strategies for how to manage that risk, and how the Age Pension can act as a safety net.
Is superannuation taxed differently once I retire?
Generally yes, and often more favourably — see Tax on Superannuation Withdrawals After Retirement for the specifics based on your age and benefit type.
Preservation age, pension thresholds, contribution rules and the Age Pension means test are set by legislation and indexed periodically; confirm current figures on ato.gov.au, servicesaustralia.gov.au and moneysmart.gov.au before publishing or relying on them.
This article contains general advice only. It has been prepared without taking into account your personal objectives, financial situation or needs, and does not constitute a recommendation to acquire, hold, or dispose of any financial product. Before acting on this information, consider its appropriateness to your own circumstances, and seek independent financial, tax and/or legal advice, or speak with a licensed financial adviser, before making any decision.
