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Retirement income explained

Planning and advice | | 2 min read
Cheerful mature couple sitting on sofa at home

Building up a healthy superannuation balance is important, but how you access and invest your money in retirement will determine how long it lasts. 

Transferring your super balance into a Retirement Income account allows you to draw down an income from your savings while the balance continues to earn investment income in a tax-free environment. 

Keep reading to learn more about your options, how you can structure your retirement income, and how an Equip Super financial planner can help. 

When do I access my super? 

Before you start planning your retirement, you’ll need to know when you can access your super. 

While a person can retire at any age, you won’t be able to touch your super until you meet your preservation age (or you meet another condition of release). Preservation age will vary from person to person, as it’s based on your age and the year you were born. For anyone born on or after 1 July 1964, the preservation age is 60. 

Once you reach your preservation age and you either change jobs or retire from the workforce you can access your super.  Alternatively, you can wait until you’re 65, at which point you can access your super without restrictions.  

What can I do with my super? 

There are four basic options when it comes to your super and retirement. You can: 

  • Leave the money in your super account and make withdrawals from time to time when you need to.
  • Transfer the money into a Retirement Income account. This allows you to draw a regular income from your super while it’s invested in a tax-free environment with your super fund. 
  • Withdraw the funds.  You can withdraw the money from your super account and deposit it elsewhere, e.g. a bank account.  
  • A combination of the above. Another option would be to withdraw some funds, and leave the rest in a Retirement Income account. Some people choose this option to pay down a mortgage, for example.   

We strongly recommend consulting a financial planner to understand any tax implications before making a decision.  

Regular income payments in retirement 

A Retirement Income account could be a great way to invest your money in retirement, because there’s no tax payable on the investment earnings you make. 

Just like a regular super account, you can choose which investment option you’d like to place your money in. This includes a full suite of growth or defensive options for you to choose from depending on the investment risk you are comfortable with. You’re able to adjust your mix anytime you see fit. 

For those that wish to leave the investing up to our team of investment professionals we have the MyPension investment strategy.  

Once that’s done you just need to decide how much of your super you’d like to receive regularly as income payments. You get to decide how often you’d like to receive the payments, so might choose to follow a similar pattern to the salary and wages you received during your working life (subject to an annual minimum withdrawal).  

And remember, you also have the ability to draw out extra money if you need it. This might be used for something like a new car, holiday, or home renovations.   

Not sure where to start? Our financial planners can help. The initial appointment is availabe at no additional charge to members. 

How super and the Age Pension work together 

A healthy super balance is a great way to start retirement. But most Australians draw on a range of income sources in their retirement. This can include dividends from shares, rental income from investment properties, and in many cases, the Age Pension. 

Depending on your financial position, you may qualify for a full or part Age Pension. This may allow you to combine your regular income payments with the Age Pension to create a more substantial income stream. 

According to ASFA (Association of Superannuation Funds of Australia) as at March 2024, a couple needs approximately $690,000 in retirement savings at age 67 for a comfortable lifestyle. For a single person at the same age that number is $595,000. 

Even if your super balance falls short of those amounts, placing your super in a Retirement Income account and combining it with the Age Pension can be a good way to support your retirement income.  

Plan a better retirement 

Whether you’re ready to retire or just thinking about it, a financial planner can help you better understand your options. That may mean a gradual transition to retirement, a long-term strategy to help you retire early, or a conversation about the best way to maintain your income in retirement.   

Speak to us today, the first appointment is obligation free and available at no additional charge. 

Issued by Togethr Trustees Pty Ltd ABN 64 006 964 049, AFSL 246383 ("Togethr"), the trustee of the Equipsuper Superannuation Fund ABN 33 813 823 017 ("the Fund"). The information contained herein is general information only and does not take into account your personal financial situation or needs. You should consider whether this information is appropriate to your personal circumstances before acting on it and, if necessary, you should also seek professional financial advice tailored to your personal circumstances. Where tax information is included, you should consider obtaining personal taxation advice. Before making a decision to invest in the Equipsuper Superannuation Fund, you should read the appropriate Product Disclosure Statement (PDS) and Target Market Determination for the product which are available at equipsuper.com.au.  Financial advice services may be provided to members by the trustee’s related entity Togethr Financial Planning Pty Ltd (ABN 84 124 491 078; AFSL 455010). *Past performance is not an indication of future performance.