Turning super into a retirement income
Once you’re ready to access your super, you have options – and the right one depends on your age and where you’re at with work.
I’m aged between 60 and 64
At 60, you’re able to access your super and have several options open to you. You can choose one or combine multiple retirement income options to support your needs.
Option 1. Start with a transition to retirement (TTR) account
Not ready to stop working completely but want to work less, or top up your take-home pay? A TTR account lets you access up to 10% of your super each year, tax free, while you keep working.
It’s designed for this exact moment, that in-between stage where full retirement isn’t quite right yet.
When you turn 65, your TTR automatically converts to a retirement income account.
Starting a TTR can be complex, so we recommend talking to one of our super specialists for help and guidance before setting one up.
Want to know how a TTR works?
Transition to Retirement (TTR) account sounds complex, but we’ll show you in detail who it’s for, how it works, and provide real examples of how it can be used in different situations.
Option 2: Open a Mercer SmartRetirement Income account
If you’ve stopped working, you can move your super into a Mercer SmartRetirement Income account, often referred to as an allocated pension. It’s a tax-free way of receiving a regular income from your super when you retire.3
- Your super balance stays invested so it will continue to grow over time allowing it to last longer in retirement.
- You can start an allocated pension from age 60 once you’ve stopped working, or from age 65 regardless of your work status.
You may be eligible for the Retirement Bonus
If you've been with Mercer Super for a year or more, you may be eligible for a one-time bonus payment when you open a Mercer SuperRetirement income account.
Learn about more about the Retirement Bonus.
TTR vs allocated pension – what’s the difference?
There are important differences between Transition to Retirement (TTR) and allocated pension accounts. Generally, TTR accounts are designed for people who are still working and haven’t yet retired. Allocated pensions are for those who’ve retired from work permanently.
Both accounts, TTR and allocated pension, share the same basic rules.
- You can’t continue contributing to a TTR or allocated pension account once it’s set up, so if you’re still working and contributing to your retirement savings, you’ll need to keep a super account open to receive those contributions.
- There is a minimum withdrawal amount you must take out each year.
The table below shows other differences between the two types of accounts.
Start a retirement income account
Learn more about starting your retirement income account and earning tax-free income.
| Transition to Retirement (TTR) account | Allocated Pension account | |
|---|---|---|
| Age requirement | Age 60-641 | Age 60 and have left the workforce for good, or age 65 |
| Pays a regular income | Yes | Yes |
| Can make lump sum payments | No2 | Yes, up to 100% of account balance |
| Minimum annual payment amount | 4% per financial year | Yes, depends on your age (4%-14% per financial year) |
| Maximum annual payment amount | 10% per financial year | None |
| Tax-free income payments | Yes | Yes |
| Tax applied to investment returns | 15% | 0%3 |
| Choice of investment | Yes | Yes |
| Additional contributions | No | No |
| Does the transfer balance cap apply? | No | Yes |
1 When you reach age 65 your balance will be automatically transferred to an allocated pension account.
2 You can take a single income payment of up to 10% of your account balance per financial year.
3 Investment earnings in an allocated pension are normally tax-free. From 1 July 2026, Division 296 added an extra tax on total super balances (the total amount you hold in super and pension accounts both in and out of Mercer Super) over $3 million. For balances between $3 million and $10 million, an additional 15% tax applies to the earnings on the amount above $3 million. For balances above $10 million, an additional 25% tax applies to the earnings on the amount above $10 million. If you are impacted, the ATO will issue you a notice and calculate the tax that will apply.
Option 3: Take out a lump sum
Once you’re eligible to access your super and stopped working, you can withdraw some or all of your account balance as a lump sum. And you don't have to take it all at once. Leaving money in your super can help it keep growing and support your future income.
You can also withdraw further lump sum amounts from your pension account as needed.
Why take a lump sum?
You can withdraw a lump sum from your super when you turn 60 (and stop working). Taking some of your super as a lump sum could help you pay for large expenses, like paying off your mortgage, updating your car, holidays, home renovations and even health costs.
How do I withdraw a lump sum?
You can withdraw some or all your account balance as a lump sum from your super account or pension account by completing our withdrawal request form.
I’m over 65
At 65 you have full access to your super whether you’re working or not. You can set up a regular income, take out a lump sum (see above), or do a bit of both. Your new option at 65 is starting a retirement income account, whether you’re working or not.
If you have been using a Transition to Retirement account, it automatically converts to a retirement income account when you turn 65.
Open a retirement income account using your super
Opening a retirement income account (or allocated pension) is a tax-effective way of receiving a regular tax-free income from your super when you reach 65 and you no longer pay tax on investment earnings.3
- Your super balance stays invested so it will continue to grow over time allowing it to last longer in retirement.
- And if you’re still working, an allocated pension can help boost your income or allow you to maintain your income while working less.
You may be eligible for the Retirement Bonus
If you've been with Mercer Super for a year or more, you may be eligible for a one-time bonus payment when you open an allocated pension account.
Learn about more about the Retirement Bonus with Mercer Super.
Start a retirement income account
Learn more about retirement income, and steps to open an account.
I’m over 67
Now that you’re 67, you may have another income option to consider. You can already start a retirement income account from your super and take a lump sum if you need to. And because you’re now 67, you may also be eligible for the government Age Pension.
Using the government Age Pension
Retiring with less super than you need can be challenging but the Age Pension is a financial safety net that allows you to retire with confidence. Combined with your retirement savings, the Age Pension can help provide a reliable and consistent source of income.
It can be used as your primary source of income or as a welcome boost to help your super go further, for longer.
Quick Tip
Even if you’re not eligible for the Age Pension on the day you retire, you may become eligible as you draw down your super balance, so it’s a good idea to consider it as part of your long-term retirement planning and check in regularly.
Am I eligible for the Age Pension?
As well as the age requirement, you’ll also need to meet other criteria such as residency requirements, the income test and an assets test.
Use the Age Pension Eligibility Calculator to see if you can get the Age Pension, how much fortnightly income you might receive, or if you’re eligible for the Commonwealth Seniors Health Card.
Top tip: You can submit your Age Pension application up to 13 weeks before your 67th birthday.
Check if you’re eligible
To make the process easier, Mercer Super has partnered with the pension experts, Retirement Essentials, to help you easily check your Age Pension eligibility.
Advice and tools, whether you need a little help or a lot
As a Mercer Super member, you have access to a range of advice options, including limited advice about your Mercer Super account at no additional cost.
Explore more: it’s your time to thrive
Transition to Retirement (TTR) accounts
Setting up a TTR Transition to Retirement (TTR) account sounds complex, but we’ll show you in detail who it’s for, how it works, and provide real examples of how it can be used in different situations.
Will my super go the distance?
Many of us can now expect to spend 20 years or more in retirement, so it’s no surprise many people worry they’ll run out of money. The good news is there are ways to boost your savings, so your money lasts longer.
Working in retirement
Retirement doesn't always mean you stop working completely. In fact, many Australians are working longer than ever before, some because they want to, others because they need to.
Issued by Mercer Superannuation (Australia) Limited (MSAL) ABN 79 004 717 533, Australian Financial Services Licence #235906, the trustee of Mercer Super Trust ABN 19 905 422 981 (‘Mercer Super’).
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Any information on tax in this document is based on our interpretation of current tax laws which are subject to change. We recommend you obtain your own tax advice when considering the application and impact of tax laws that may affect you. No warranty as to the accuracy or completeness of this information is given and no responsibility is accepted by Mercer or any of its related entities for any loss or damage arising from reliance on the information.