Once you’ve retired, theoretically speaking you may never need to work another day again, so why should you have to worry about budgeting your pension? Taking a super pension can help make managing your super easier as it provides you with a regular and reliable income.

How does a super pension work?

A super pension provides you with steady payments, while usually still allowing you to make a lump sum withdrawal if you need to. One of the advantages of a super pension is that many kinds allow you to keep your money invested within the super system. Further, according to the Australian Taxation Office if you start a super pension while qualifying for a condition of release, like reaching 65 years old and retiring, the earnings your investments make will typically be tax exempt.

The exact amount is determined by your age and circumstances, but the chart below shows the general rules. However, there is no maximum withdrawal limit.

You can schedule your pension payments as frequently as you like – annually, half-yearly, quarterly or monthly – meaning that you can use what works best for you. Additionally, any remaining money in your pension account when you die will be paid to you nominated beneficiary.

Super pension rules

Note though, that the amount you withdraw can have an impact on any Age Pension entitlements you have. An account-based pension provides you with both an asset and an income for the purposes of the Age Pension test, potentially reducing the amount of the Age Pension you can receive.


You should also remember that there is a transfer balance cap of $1.6 million that you can move to an account-based pension. Amounts in excess of this must remain in the accumulation phase of super.

Consider a transition to retirement pension

If an account-based pension doesn’t suit your needs, particularly if you haven’t yet reached a condition of release, you could consider a transition to retirement pension (TTR). This allows you to access some of your super while continuing to work. To be eligible for a TTR pension, you must have reached your preservation age, 60 for most people, but you don’t need to have retired.


A TTR pension can help to ease you into retirement, while allowing you to still earn super guarantee payments. However, you must withdraw between 4% and 10% of your pension fund balance each year, and you cannot withdraw a lump sum payment.

If a super pension sounds like it suits your needs, your first task should be to look around at the products on offer.

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