A retirement pension, or income stream, provides you with a regular income from your superannuation savings.
Account-based pensions are the most common type of superannuation pensions. Many retirees choose an account-based pension, also known as an income stream, because it can offer flexibility and tax concessions.
So how does an account-based pension work?
Generally you need to be permanently retired to access your super but a transition to retirement pension, sometimes known as a pre-retirement pension, is a specific type of account that allows you to begin receiving an income from your super even if you haven’t permanently retired.
A transition to retirement pension works in the same way as an account-based pension outlined above, except that a maximum of 10% of your account balance can be taken in pension payments each year.
This type of strategy might be helpful if:
When you take these choices and factors into account, together with the potential tax implications and possible effects on Age Pension or other government entitlements, it’s important to get the right advice for your circumstances before finalising any decisions. There are different advice options available to you as a member.Find out more
The idea of retiring at a particular age is not something that will suit everyone. (Source: CommBank)
Try this handy calculator to help you determine how long you expect your pension to last and ways to make it last longer using different options. (Source: ASIC MoneySmart)