Retirement: How will you use your super?

Retirement: How Will You Use Your Super?

After spending decades watching our super balances grow, the prospect of retirement in the next few years can bring about confusion regarding the optimal utilisation of your super.


Here are some of the considerations for the popular options to think about how you will use your super:

Easing into retirement:

You can keep working and receive regular payments from your super when you have reached your super preservation age (55 to 60, depending on your date of birth) and are under 65.

Using a transition-to-retirement income stream allows you to reduce your working hours while maintaining your income. To take advantage of this option you must use a minimum 4 per cent and a maximum of 10 per cent of your super account balance each financial year.

A transition-to-retirement strategy is not for everyone, and the rules are complex. It is important to get independent financial advice to make sure it works for you.


  • Allows you to ease into retirement by working less but receiving the same income, using the transition-to-retirement income stream to top up your salary.
  • If there is spare cash each week or month, you can make extra contributions to boost your super, perhaps by salary sacrifice if it suits you.
  • There are tax benefits. If you are above 60, the transition-to-retirement pension payments are tax-free (although the earning in the fund will continue to be taxed).


  • The account-based pension may affect your Centrelink entitlements.
  • There is a risk that the amount in your super to draw on might not last as long as you do.
  • The amount you can use for your pension is limited by the transfer balance cap.

Withdrawing a lump sum

You can choose to take your super as a lump sum or a combination of pension and lump sum payments, once you have met the working and age rules.


  • Gives you a chance to pay off any debts to help relieve any financial pressures.
  • Allows you to make an investment outside super in a property, for example.
  • Pay little or no tax if you are 60 and older.


  • If you are using the lump sum to invest, you may pay more tax.
  • Reducing your super balance now, means less for later.
  • Receiving a lot of money at once may encourage you to spend more than is wise.

Access to SMSF funds

There are a number of additional issues to consider for those with self-managed super funds (SMSFs). For example, you will need to carefully check your Trust Deed for any rules or restrictions for accessing your super and consider how your fund can meet pension requirements if it holds large assets that are not cash, such as a property. It essential to consult a financial planner to understand your circumstances, so reach out to us if you’d like help.

As you navigate the complexities of retirement planning, the guidance of a Certified Financial Adviser can make all the difference. Don’t let confusion hold you back – take the first step towards a secure future. The process of choosing the best approach for your retirement income can be daunting, so let us walk you through the options and advise on the most appropriate strategies.

Reach out to our team at 1300 731 372 or book an appointment now to discuss your unique needs. Your retirement journey starts with personalized advice from KDM Financial.