Understanding retirement income
Australia’s retirement system is built on three pillars – super, the government Age Pension and personal savings. Many retirees rely on a combination of all three, but you may only rely on one or two. Understanding how they work together puts you in control of your financial future.
How do I turn my super into income?
Your super has been building throughout your working life - now it’s time to put it to work for you.
- Aged 60-64 and stopped working: You can access your super in full as a regular income stream or a lump sum, with tax-free pension payments and investment returns by starting a Mercer SmartRetirement income account.1
- Aged 60-64 and still working: You can access up to 10% of your super balance each year with tax-free payments by opening a Transition to Retirement (TTR) account while continuing to build your super. With potential tax benefits.
- Aged 65 or older: You can access your super in full whenever you need it – working – or not - with tax-free payments and investment returns,1 through a Mercer SmartRetirement income account.
- A lump sum withdrawal: You can also withdraw lump sums for specific needs – such as a car, holiday or home renovation. Lump sum withdrawals can be made from your super account, or your Mercer SmartRetirement income account. Just keep in mind that making withdrawals will reduce your long-term retirement income.
Turn your super into regular income
Talk to our super specialists to discuss your options.
Can I work in retirement?
Retirement doesn’t have to mean stopping work completely. Many people choose to keep earning – whether that's full-time, part-time, casual or consultancy work. And while you’re still earning, your employer is required to continue paying super contributions, helping your balance grow.
Can I also get a government Age Pension?
The Age Pension is income support paid by the government to eligible Australian retirees. It can be used as a primary source of income or as a welcome boost to your income from super. To receive the government Age Pension, you need to be 67 years or older. You’ll also need to meet other criteria such as residency requirements, the income test and an assets test.
Even if you’re not eligible for the government Age Pension, there are other government benefits available that may help you stretch your retirement income further.
Check regularly
Although you may not be eligible for the government 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.
Find out if you’re eligible
Checking to see if you’re eligible is easy. Mercer Super has teamed up with the pension experts at Retirement Essentials to provide you with a simple eligibility calculator, that can also show you how much fortnightly income you might receive from the government.
Additional resources
- Government benefits for seniors
There is also a range of state-based benefits that can support your journey through retirement.
- Low Income Healthcare Card
Allows those with lower incomes to access cheaper healthcare and other discounts.
- Pensioner Concession Card
For discounts on healthcare services, medicines and some community services.
What about my savings, investments, and home?
If you have money in savings, or investments like shares or property, this could top up your retirement income. If you own your home, you could also use the equity in your home to boost your income in retirement.
There’s a lot to think about – should you keep or sell your investments, what are the tax implications, and will they affect your eligibility for government benefits?
You might consider putting the equity in your home to work by making a downsizer contribution.
Not sure where to start?
Take the first step by talking to our dedicated team of super specialists. Together we’ll help you understand where you are today and what steps you can take to look forward to retirement.
Explore more: it’s your time to thrive
When can I retire?
Choosing when to retire is personal – but a few key milestones are worth knowing. Other personal milestones can also shape when the timing feels right for you.
How much super will I need?
According to the Australian Bureau of Statistics, many of us can expect to live well into our 80s. How much you’ll need to fund those years depends on your lifestyle and the financial choices you make.
Advice and tools to get you started
Planning for the future can feel daunting. Whether you need a little help or a lot to get on the right track from the start, we’re here to support and guide you.
1 Investment returns can be subject to tax if the total of all of your super and pension accounts exceeds $3m.
* Any information in this material regarding legal, accounting or tax outcomes does not constitute legal advice or an accounting or tax opinion and prior to relying and acting on this information it is important that you seek independent advice from a qualified lawyer or accountant regarding this information. Past performance is not a reliable indicator of future performance. 'MERCER' is a registered trademark of Mercer (Australia) Pty Ltd ABN 32 005 315 917.
The material contained in this document is based on information received in good faith from sources within the market and on our understanding of legislation which we believe to be accurate.
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’).
Any advice provided is of a general nature and does not take into account your objectives, financial situation or needs. Before acting on any advice we recommend you obtain your own financial advice and consider the Product Disclosure Statement and Financial Services Guide available at mercersuper.com.au. The product’s Target Market Determination setting out the class of people for whom the product may be suitable can be found at mercersuper.com.au/tmd.
‘MERCER’ and 'Mercer SmartPath®' are Australian registered trademarks of Mercer (Australia) Pty Ltd ABN 32 005 315 917.