Your super is likely to be a primary source of income during retirement, but it may not be the only one
Australia’s retirement system relies on three pillars – super, the Age Pension and private savings. Many retirees rely on a combination of all three. Understanding how to access each of these sources, and how they work together, can help you get a clearer picture of your financial position.
How do I turn my super into income?
You’ve been putting aside a portion of your income into super for your working life, so it’s likely to be a major source of income in retirement. There are three different ways you can turn your super into income once you’re 60 years or older:
- if you’re aged between 60-64 years and still working you may choose to start a Transition to Retirement (TTR) strategy
- if you’ve permanently retired from the workforce, or you’re already 65 years or older, you may choose to open an allocated pension account
- once you have access to your super, you may choose to withdraw lump sum amounts. Lump sum withdrawals can be made from your super account, or your allocated pension account.
Learn more about turning your super into a retirement income
Can I also get a government Age Pension?
The Age Pension is income support paid by the government to eligible Australian retirees. It can be used as a primary source of income or as a welcome boost to your income from super. To receive the government Age Pension, you need to be 67 years or older. You’ll also need to meet other criteria such as residency requirements, the income test and an assets test.
Can I keep working in retirement?
You might decide to supplement your income with paid work in retirement. While you’re still working, your employer will top up your super and help it stretch further. Continuing to work part-time can also help you ease into retirement and give you purpose, structure, and social connection.
Additional resources
Even if you don’t get the Age Pension, there are a few government benefits available that may help you stretch your retirement income further.
- Commonwealth Seniors Health Card
For discounts on medication and other concessions
- Low Income Healthcare Card
For cheaper healthcare and other discounts
- Pensioner Concession Card
For discounts on healthcare services, medicines and some community services
- Government benefits for seniors
There is also a range of state-based benefits that can support your journey through retirement
- Can I get the government Age Pension?
Find out more about the government Age Pension and who can get it
What about personal savings, investments, and home equity?
If you have money in savings, or investments like shares or residential property, this could top up your retirement income.
There’s a lot to think about – should you keep or sell your investments, what are the tax implications, and will they affect your eligibility for government benefits? You might consider putting the equity in your home to work by making a downsizer contribution.
A Mercer financial adviser can help you with these and a wide range of other financial topics with Beyond Super – a fee-based advice service offered by Mercer Financial Advice.
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Give your ideal financial future the best chance to become a reality, with Beyond Super – a fee-based service that can consider your super, as well as a wide range of other financial topics.
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Past performance is not a reliable indicator of future performance. 'MERCER' is a registered trademark of Mercer (Australia) Pty Ltd ABN 32 005 315 917.