What is a Superannuation Pension?

Published: 30-Apr-2024

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Imagine a reliable stream of income to see you through your golden years. In Australia, a superannuation pension (also called an account-based pension) helps you do just that.

It allows you to tap into your super savings and receive regular payments throughout your retirement.

Benefits of a Superannuation Pension:

  • Regular income: Provides a steady stream of income throughout retirement to replace your salary
  • Tax advantages: Your pension payments may be tax-free and superannuation earnings are no longer taxable
  • Flexibility: You have control over the amount and frequency of your pension payments (within certain limits)

Keep in mind:

  • Preservation: In general, you can only access an account based pension upon meeting a condition of release such as reaching age 65 or retirement after age 60
  • Not guaranteed for life: Unlike an age pension from the government or an annuity, an account based pension is not guaranteed income for life. It depends on how much you have saved and how you manage your withdrawals and investments.
  • Minimum pension withdrawals: Account based pensions are subject to minimum withdrawal requirements which start at 4% per annum and increase with age

ATO: Income stream (pension)

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