An account-based pension keeps your super invested during your retirement. This turns it into a regular income to help fund your retirement lifestyle.
At Aware Super we call this a retirement income account.
You can choose how much your income payments will be, when you get paid, and can make extra cash withdrawals whenever you need to.
Around 30% of the retirement income you get from super could come from investment earnings (see chart below). Best of all, investment earnings are 100% tax-free, and if you’re 60 or over, your income payments are 100% tax-free too.
So, keeping your savings invested in a retirement account is a great way to make your super last longer in retirement.
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Case study: Meet Jane
See how Jane could increase her retirement income by keeping her savings invested in super with an account-based pension.
Meet Jane. She’s 67 years old and has retired with $300,000 in her super.
She’s deciding whether to open an account-based pension with her super fund or take the money out and put it in a bank account.
Option A: Jane invests her savings in super through her retirement account
Her savings plus the investment earnings could provide her with an income of $15,400 per year. This will last until she is 95 years old.
Option B: She puts her savings into a bank account.
In a bank account she would earn about 3% interest. Here, her savings will provide her with around $11,300 per year.
This means Jane could get $4,100 more income each year if she keeps her money invested in super.
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The extra income created by the investment earnings makes up around 30% of the income paid by your account-based pension each year.
Find out more about how an account-based pension works and a retirement account with Aware Super.
Where to next?
Find out more about the Government Age Pension
You may be eligible for the Government Age Pension when you to retire to help fund your life in retirement.
Attend a webinar or seminar
Join our experts as they break down super and finances into easy-to-understand topics through our live webinar education series.
Speak to a financial planner
A financial planner can work through complex financial matters and help you create the right strategies to achieve your financial goals in retirement. They’ll explain any next steps, fees and charges before progressing.
