If you find pensions, lump sums, and tax confusing, we can help. Read on.


There are several ways you can access your super when you retire, each with  pros, cons, and tax rules. On this page, we’ll explain four common ways to access your super. 


When can I access my super?

There are several rules governing when you can access your super. Generally, you’ll need to have reached your preservation age to do so.


Your preservation age is determined by the year you were born – use the table below to check when yours is. 

Date of birth
Preservation age
Date of birth

Before July 1960 

Preservation age


Date of birth

1 July 1960 – 30 June 1961 

Preservation age


Date of birth

1 July 1961 – 30 June 1962 

Preservation age


Date of birth

1 July 1962 – 30 June 1963 

Preservation age


Date of birth

1 July 1963 – 30 June 1964 

Preservation age


Date of birth

From 1 July 1964 

Preservation age



After you reach your preservation age, your employment status will affect how you can access your super. If you fully retire before or after reaching your preservation age, you may access your super however you’d like. This also applies where you cease an arrangement of employment after turning 60, such as if you change jobs.


You can also access your super as a transition to retirement pension after you reach your preservation age. 


Once you turn 65, you can access your super however you’d like regardless of your employment status. 

What are the ways I can access my super?

There are four main ways to access your super. You can use some of these in combination. Not all of these options are suitable for everyone. Speaking to a financial adviser may help you choose the right options for you. 



Account-based pensions

Account-based pensions provide you with regular tax-free income from your super savings. To start an account-based pension you must have turned 65 or reached your preservation age and fully retired. Or be over 60 and have stopped work. 


When opening your account-based pension, you can choose: 

  • how much of your super money to place in the pension account
  • how you’d like that money invested 
  • how much income you’d like to receive 
  • how often you’d like to receive it. 

Please note though, there are limits  on how much money you can place into your pension account. This limit is called the Transfer Balance Cap. 


There is also a government mandated minimum you must withdraw each year, starting at 4% for those under 65 and increasing as you age. 


You can read more about those the transfer balance cap and minimum drawdown requirements on the Australian Taxation Office website.  


Despite these rules, account-based pensions remain a very flexible option for your retirement income. You can vary your income level depending on your needs, change the frequency of how often you get paid, and withdraw lump sums to pay for any large expenses. You can also stop the pension if you no longer need it and either transfer the account balance back into super or withdraw it completely.  



Transition to retirement (TTR) pension 

Rather than abruptly leaving the workforce, many Australians choose to gradually step away from their jobs by reducing their hours. Transition to retirement (TTR) pensions can help smooth this process by topping up your income using your super. Basically, you work less while earning the same.


It’s also possible to use a TTR pension to boost your super as you prepare to retire even if you don’t think you can afford it. This can be done by salary sacrificing a larger portion of your income into your super(so it’s taxed at 15%) and replacing the lost wages with a TTR pension. 


This strategy works as you pay less tax on the pension payments compared to your salary or wages. So, you don’t need to draw as much back out as the extra amounts you are salary sacrificing into super mean you end up in the same net position. As a result, you get a boost to your retirement savings but at no net cost to your take home pay.  


A TTR pension works much like an account-based pension, but with certain restrictions on income and lump sum payments. However, unlike an account-based pension the investment earnings are taxed the same as your super account and are not tax-free. 


To start a TTR pension you must have reached your preservation age. Once you fully retire or turn 65 your TTR will convert to an account-based pension. 




Annuities pay an income stream for a guaranteed period, such as a fixed term or the rest of your life. Annuities can either be market linked, which means payments can vary up and down from year to year – or the income can be guaranteed. If you choose a guaranteed income annuity, the income can either be fixed, increase by a set amount each year, or increase in line with inflation.  


A guaranteed income annuity can bring great peace of mind as it provides certainty that your payments will always continue regardless of how long you live or how the market is performing. Guaranteed income annuities get concessional social security treatment and could help you qualify for more age pension.


However, annuities are generally considered less flexible than account-based pensions as you can’t vary your payments levels if your circumstances change. Some annuities also limit lump sum withdrawals (including after your death).


Also, unless you purchase a market linked annuity, you cannot choose how your money is invested. Instead, the annuity provider will generally invest your money in secure lower-risk investments that may pay lower returns.  



Lump sum withdrawals

Rather than turning your super into an income stream, you may want to take some or all of it out as cash. This is called a lump sum withdrawal. 


To make a withdrawal  from your super account you generally need to have met the same requirements as for starting an account-based pension. You can also withdraw a lump sum from your account-based pension, however lump sums from annuities may be restricted, depending on the product rules.  


Lump sum payments, like account-based pension payments, are generally tax free once you have turned 60. However, once you take money out of your super account it’s no longer considered super savings. If you invest these withdrawals, you may need to declare your earnings in your tax return. 


Withdrawing lump sums can also affect how long your super may last in retirement. That’s why it’s always a good idea to speak with a financial adviser about how a lump sum withdrawal might affect your finances before making a withdrawal request. CFS can’t reverse your request after it’s been processed. 

Does it matter how I access my super?

After reaching age 60 and retiring you may be tempted to leave your super where it is and draw tax-free lump sums. However, this could result in paying a lot more in tax than if you started an account-based pension.  


The investment returns you get on your super savings are taxed at a maximum rate of 15%. Yet once you retire and start a super pension or annuity, your investment returns are tax-free. Therefore, if you just leave your money in your super account, your investment returns will be subject to tax and will be lower than if you switched to a pension. Over 10 to 20 years of retirement, starting a pension could bring considerable tax savings due to the power of compounding returns.  


A financial adviser can help you understand your options.

How can I get started?

Before you start an account-based pension, please read the relevant Product Disclosure Statement. This includes all the information you need to make an informed decision about the pension and whether it’s right for your needs.  


To open an account-based pension, you’ll need to complete an application form  and confirm:

  • how much money you’d like to put into your pension account
  • how much income you’d like to receive
  • whether you’d like your payments to increase in line with CPI or at a fixed rate
  • who you’d like to receive your benefits after you pass away
  • how you’d like your money to be invested
  • your account details, so your income is paid to the correct bank account. 

Send the application form  to us by: 

Uploading the form online through our online portal

Upload a scanned copy of the completed document through our secure online portal under My Account > Upload a scanned form


Posting the form to us at: 

Colonial First State 

Reply Paid 27 

Sydney NSW 2001 


We’ll process your completed form within five working days of receiving it. If the form is incomplete, or we need to ask you for more information, a member of our team will be in touch. 


Information on this webpage is provided by Avanteos Investments Limited ABN 20 096 259 979, AFSL 245531 and Colonial First State Investments Limited ABN 98 002 348 352, AFSL 232468. It may include general advice but does not consider your individual objectives, financial situation, needs or tax circumstances.  You can find the target market determinations (TMD) for our financial products at www.cfs.com.au/tmd, which include a description of who a financial product might suit. You should read the Financial Services Guide (FSG) available online for information about our services.

What’s next?

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Things you should know

Avanteos Investments Limited ABN 20 096 259 979, AFSL 245531 (AIL) is the trustee of the Colonial First State FirstChoice Superannuation Trust ABN 26 458 298 557 and issuer of FirstChoice range of super and pension products. Colonial First State Investments Limited ABN 98 002 348 352, AFSL 232468 (CFSIL) is the responsible entity and issuer of products made available under FirstChoice Investments and FirstChoice Wholesale Investments.Information on this webpage is provided by AIL and CFSIL. It may include general advice but does not consider your individual objectives, financial situation, needs or tax circumstances. You can find the target market determinations (TMD) for our financial products at www.cfs.com.au/tmd, which include a description of who a financial product might suit. You should read the relevant Product Disclosure Statement (PDS) and Financial Services Guide (FSG) carefully, assess whether the information is appropriate for you, and consider talking to a financial adviser before making an investment decision. You can get the PDS and FSG at www.cfs.com.au or by calling us on 13 13 36