An account-based pension is the most common way Australians turn their super into a regular retirement income. Your balance stays invested, you receive regular payments, and the law sets a minimum you must take each year based on your age.

Reviewed 31/10/2026. General information only, not personal advice.

Once you meet a condition of release, such as retiring after reaching your preservation age, you can move some or all of your super into an account-based pension. Your balance stays invested in the options you choose, and you receive regular payments, for example monthly or quarterly.

Your balance goes up with investment returns and down with payments and fees. Unlike a lifetime annuity, the income isn't guaranteed: it lasts as long as your balance does.

Minimum yearly withdrawals

The law sets a minimum percentage of your balance that must be paid each year, based on your age on 1 July (or when the pension starts):

• Under 65: 4%
• 65 to 74: 5%
• 75 to 79: 6%
• 80 to 84: 7%
• 85 to 89: 9%
• 90 to 94: 11%
• 95 and over: 14%

Tax in retirement phase

Investment earnings on super in the retirement phase are generally tax-free, and pension payments are generally tax-free from age 60. A lifetime limit, the transfer balance cap, applies to the amount you can transfer into retirement phase.

Things to consider

• Investment option: how much growth you need versus how much volatility you can live with.
• Payment level: a sustainable amount that fits your lifestyle and any Age Pension entitlement.
• Fees: they reduce your balance every year.
• Beneficiaries: nominations and reversionary options shape what happens on your death. See estate planning.
• Still working? A transition to retirement pension has different rules.

See what it means for you

Your initial discussion is free, and any advice fees are explained before you decide to go ahead. Book an initial discussion or call 07 3733 1731. Meet face to face in Eight Mile Plains, or online anywhere in Australia.

Frequently asked questions

What is an account-based pension?

An account-based pension is an income stream bought with your superannuation once you've met a condition of release, such as retiring after preservation age. Your balance stays invested and you receive regular payments, subject to minimum yearly withdrawals.

Is an account-based pension tax-free?

Investment earnings on super in the retirement phase are generally tax-free, and pension payments are generally tax-free from age 60. A lifetime limit, the transfer balance cap, applies to how much you can move into retirement phase.

Can I withdraw more than the minimum?

Generally yes. You can usually take more than the minimum or make lump sum withdrawals. A transition to retirement pension has different rules, including a maximum of 10% a year.

What happens to my pension when I die?

It depends on your beneficiary nominations. The balance may be paid to your nominated beneficiaries or estate, or continue as a reversionary pension to your partner if you've set one up. This is an important part of estate planning.

Related reading

• Retirement Planning
• Account-based pension vs annuity
• Account-based pension vs TTR