Super and the government pension: what income can I expect in retirement?

We often hear that we’ll need a million dollars in super before we’re able to think about retiring comfortably. And while it’s a lovely round number, it can also be completely wrong. There’s certainly no one-size-fits-all when it comes to knowing how much you’ll need in retirement, and there’s some thought involved in working out how much you need.

So, what options are available to you?

Making withdrawals

At 65, you can access your super and seeing as it’s your money, there’s no limit on how much you can take out once you’re fully retired and have reached that age. If you want to access your super before then, you’ll need to meet a condition of release.

The Age Pension is available to you from age 65.5 to 67 (depending on your date of birth) – but that could  be years after you retire. Your super could be used to help bridge that gap before your government benefits kick in.

Account-based pension

An account-based pension uses the money you have accumulated in super to pay you a regular income. You choose the amount and frequency of payments from your super into your bank account, and while there is a minimum set by the government that you need to take each year, there’s no maximum. If you’re receiving payments and you’re over 60, these payments are tax-free, and, because you have retired, your investment returns are tax free too!

Leave your funds in your accumulation

Not sure whether you’ll need a regular payment? You can leave your funds in your accumulation account and simply take out lump sums as you need them. If you’ve met a condition of release, there’s no restriction on how much you can take out - but one thing to remember is that your investment returns are not tax free as they would be in an account-based pension.

The Age Pension

The rules surrounding how to access the Age Pension are entirely different. The Age Pension is a government benefit and is available to anyone who meets certain requirements. The amount you receive depends on a range of factors like your total assets and other sources of income. Accessing these benefits also depends on your birthday, with most people now being able to access the Age Pension at age 67.

The maximum Age Pension, including supplements, is currently $952.70 a fortnight for a single person and $1,436.20 a fortnight for a couple1. When you think about this amount compared with your current fortnightly expenses, will it be enough, or will you need your super to get you over the line?

So what’s best for me?

Of course, there is much more to the Age Pension and super payments than can be described in such few words, and it all depends on your individual circumstances. We can offer personal financial advice and explain the options that are available to you by calling us on 1300 300 820, Monday to Friday 8:30am to 5pm.


1 Department of Human Services – Age Pension (How much can you get)