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Retirement income

Retirement income products let you turn the superannuation you've saved into regular income payments.

Most superannuation payments for people over 60 are tax free but you need to ensure you manage your savings so they last as long as you do, and give you the quality of retirement you want. An important question to ask yourself is: Will your money last as long as you do?

Retirement income products
Choosing a retirement income product
Account based pensions and annuities (also known as allocated pensions)
Lifetime pensions and annuities
Life expectancy pensions and annuities
Fixed term pensions and annuities
Reverse mortgages and similar products
Term allocated pensions (also known as market-linked income streams) – a ‘complying' income stream, may disappear after 20 September 2007
Explanation of retirement income terms

Better Super changes (from 1 July 2007)
Government changes to superannuation from 1 July 2007 known as 'Better Super' impact on the type of retirement income products now available. The key changes from a retirement income point of view are:
  • New simplified pension standards mean new retirement income products (known as 'account based pensions') are available
  • Superannuation benefits paid from a 'taxed source' (where tax is paid on the super in the fund) are generally tax free for people aged 60 or over.
  • Your superannuation savings can stay in superannuation for as long as you want because compulsory payment of superannuation at 65 or 75 no longer applies
  • The assets test taper rate for age pension eligibility has changed so recipients only lose $1.50 per fortnight for every $1,000 of assets above the relevant threshold
  • Taxation of benefits under the Reasonable Benefit Limits regime (RBLs) has been abolished (from 1 July 2007)
  • The assets test exemption for 'complying' income streams no longer applies for income streams purchased on or after 20 September 2007.
  • The removal of taxation under the RBL regime and the removal of the assets test exemption for 'complying' income streams is likely to mean that some existing products will no longer have any use and may disappear from the market altogether.
  • Pensions and annuities that commenced before 1 July 2007 will be unchanged but will be deemed to meet the new minimum standards.

Read more about the new rules on the ATO website


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