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Retirement income streams

Your retirement income can come from a variety of sources. Here we explain the different options to help you plan ahead.
Published 17 May 2023   |   4 min read

Australians are living longer than ever before, with retirement often lasting two to three decades. For those approaching retirement, making sure your income lasts the rest of your life will likely be top of mind.

Although you won’t get paid a salary when you retire, you can still receive income from a variety of sources.

Understanding your options for regular income streams in retirement can help you to plan so you have enough to cover more than just the basics and enjoy a comfortable lifestyle.

It can also help to alleviate the stress that may come with no longer receiving a regular pay cheque.

Here we look at different retirement income streams.

Income from your super

An account-based pension is a retirement income stream made up of regular payments from your super savings. You get to choose how often you receive your regular income payments and how much super to withdraw each year, subject to minimum withdrawal requirements. You can also make lump sum withdrawals when you choose.

If you’re 60 or over, this regular income stream will be tax-free. Earnings on the balance in a retirement income stream (up to transfer balance cap) are also tax-free.

Your account-based pension income payments will stop once your super savings have run out, so it’s important to plan ahead to make your super savings last.

The Age Pension

The Age Pension is a means-tested income stream paid to older Australians by the government. To be eligible for the Age Pension, you must meet certain criteria:

You must meet the government Age Pension age, which will differ depending on when you were born:

Date of birth AGE PENSION age
Between 1 July 1952 - 31 December 1953 65 years and 6 months
Between 1 January 1954 - 30 June 1955 66 years
Between 1 July 1955 - 31 December 1956 66 years and 6 months
From 1 July 2023, Age Pension age will be 67 years if you were born on or after 1 January 1957.

Source: Services Australia

Residence rules – you must be an Australian resident and have lived in Australia for at least 10 years.

The income test – income from all sources will be assessed to determine how much you’ll receive.

The asset test – all asset types are assessed, including any property or possessions you own or have an interest in, including those held outside of Australia. The amount of pension you receive will depend on the value of your assets.

Relationship - The amount you receive will also depend on if you’re single or partnered.

Income from investments outside of super

Super and government benefits are not the only source of income in retirement. Many Australians hold personal investments outside of super, such as property, managed funds and shares. These assets are often an important component of retirement income, particularly given the limits to the amounts Australians can contribute to their super each year.

Depending on your personal circumstances, earnings from investments outside of super may not be as tax-effective as earnings from your retirement income stream, which are generally tax-free.

We recommend you seek financial advice when considering what is right for you. This is general information only and does not take account of your individual investment objectives, financial situation or needs. Before acting on it, consider its appropriateness to your circumstances and read the Financial Services Guide and Product Disclosure Statement.


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