Most people need to make sure they'll continue having an income in retirement - a bit like a payday, but without needing to show up to work. The main ways retired Australians access an income in retirement are through their super and the Government Age Pension.
Some people also have personal savings and investments they can lean on to fund their retirement. And, of course, if you continue some form of employment during retirement, you’ll also have that wage.
Move your super into a retirement account
Leave your super where it is to continue accumulating
Withdraw your super balance as a lump sum
You can use your super to pay yourself a regular income. It’s simply a matter of setting up a Retirement Income account. These types of accounts are managed by your super fund, and they can:
Eligible Aware Super members can get a retirement bonus to help you retire with more.
Open a Retirement Income account and you may receive up to $13,000 tax-free.[M6] It’s a loyalty bonus for eligible Aware Super members.
Contributions made by you and your employer
Earnings on the investments made by your super fund
The earnings from your super investments play a major part in helping your money go further and last as long as possible even after you retire. That’s because when your money stays invested, it can keep growing.
We estimate that around 30% of the income paid from your super comes from investment earnings you make in retirement. You can keep earning investment returns in retirement by starting a Retirement Income account.
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A Retirement Income account is how you pay yourself a regular income from your super.[M5] Here’s how it works:
Like all financial decisions, it’s important to understand the pros and cons of starting a Retirement Income account.
In short, for most of your working life, your super is held in an accumulation account, where your employer makes contributions, and you can add extra savings if you choose. A Retirement Income account is where you access your saved super and turn it into regular income.[M5] Both types of accounts are provided by your super fund.
When you open a Retirement Income account your money stays in the super system but there are some differences in how the account works.
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| Retirement Income account | Future Saver super account | |
|---|---|---|
| What is this account for? | For when you’re setting up or in retirement | For when you’re building your super savings |
| Income | Choose when and how much you get paid (including lump sums if you need them) | In general, you cannot access your money until you retire |
| Tax | Money you transfer into a Retirement Income account is tax free up to the transfer balance cap. Your income payments are also 100% tax free. | The money your employer contributes to super is taxed at 15%. |
| Tax on your investment earnings | Your investment earnings are tax free | Your investment earnings are taxed at 15% |
| Investment options | You can choose from a range of investment options including investment options specifically designed for retirement | You can choose from a range of investment options |
| Contributions | You can’t add money to your Retirement Income account, but you can open more than one Retirement Income account | You can make additional before and after-tax contributions to your super to keep it growing |
It’s entirely your choice when it comes to how much of your super you’d like to move to a Retirement Income account. You can leave some or all of your money in your super account (which comes in handy if you want to return to work after retiring).
The Government Age Pension is there as a safety net if you don’t have much super or if your super runs out. The important thing to know is that you can still be eligible for Age Pension payments even if you have super savings. A Retirement Income account is designed to work together with the Age Pension.
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| Retirement Income account | Government Age pension | |
|---|---|---|
| Age | In general, you can start payments from age 60 once a condition of release is met | You need to be 67 before you can apply for the Age Pension |
| Where does the money come from | Your super savings | Money from the government |
| Payment account | You choose when and how much you get paid | Your payments are set by the government and based on your eligibility |
| How long do payments last | Your payments will stop once your super runs out | Your pension payments will continue as long as you are eligible |
Staying in control of your money might have you considering withdrawing some or all of your super as a lump sum when you retire, but there are a few important things to think about:
Most Australians use a combination of their superannuation and the Government Age Pension to live off when they retire. Some people also have personal savings and investments they can lean on to fund their retirement, while others keep working in some capacity.
A retirement income is the money that you live on once you retire and don’t rely on the salary from your employer like you did when you were working. Your retirement income may come from a combination of sources, including your super that you turn into a Retirement Income account, income from your investments, and the Government Age Pension.
If you are 65 or over, you can access your super whenever you’d like. Before 65, there are rules around when you can withdraw your super, known as conditions of release. These rules consider both your age and work situation to help ensure your super is there when you need it in retirement.
You can withdraw your super balance as a lump sum, move your super into a Retirement Income account, leave your super where it is to keep accumulating, or a combination. There are tax advantages and considerations you should think about. Learn more about the advantages and considerations of a Retirement Income account.
Yes, you can, and you might like to consider doing this if you’re thinking of returning to work after you retire. There may be fees and costs for keeping your account open.
Most people need around 70% of their current take-home pay to retire. Learn more about much how much you'll need to retire.
The minimum investment amount for an Aware Super Retirement Income account is $20,000.
No. The minimum investment amount is $20,000 and there’s a cap on how much you can transfer; the general lifetime limit is currently $2 million.
No, you don’t, which is one of the major benefits of setting up pay days through a Retirement Income account.
You can choose one option or a mix of options from our investment menu. If you don’t make an investment choice, we’ll invest your account in our Conservative Balanced option which is designed to suit most retirement members. It aims to provide a balance between capital stability and growth, while protecting against the effects of inflation. You can make changes to your investment option at any time.
[M5] Retirement income and investment earnings are not guaranteed. Payments will cease once the account balance is depleted. Consider if Aware Super is right for you and the PDS and TMD at aware.com.au/pds. Issued by Aware Super Pty Ltd (ABN 11 118 202 672, AFSL 293340), trustee of Aware Super (ABN 53 226 460 365)
[M6] Eligibility criteria apply. The payment of the Retirement Bonus is at the discretion of Aware Super. We reserve the right to change or stop offering the Retirement Bonus at any time, without notice. The Retirement Bonus is calculated and applied at the time your Retirement Income account commences and may differ from any estimate you have previously obtained. If you withdraw 50% or more of your Retirement Income account starting balance within 12 months of opening the account, Aware Super reserves the right to deduct the Retirement Bonus from your Retirement Income account. Withdrawals include lump sum payments, rollovers, regular income payments, and one-off income payments.
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