After decades of contributing to super, retirement finally arrives, and with it comes one big question: what should I do with my super once I retire?
It’s a genuinely important decision. How you manage your super after retirement shapes how long your savings last, the lifestyle you can afford, and how secure you feel in the years ahead. The good news is there are really only a handful of options, and understanding the trade-offs between them takes most of the fear out of the choice.
Here is what happens to your super at retirement, the main paths available, and the trade-offs we see clients weigh up every week.
What Happens to Your Super at Retirement
When you retire, your super can move from the accumulation phase, where you built it up, into the retirement phase, where it pays you an income. If you’re 60 or over and your fund is a taxed fund (most are), withdrawals are generally tax-free.
From there, the main options are:
- Take some or all of your super as a lump sum
- Start an account-based pension
- Use a combination of both
- Leave it in accumulation for now
Which mix suits you depends on your goals, spending plans, other income sources like the Age Pension, and your comfort with markets. There is no universal right answer, only trade-offs.
Option 1: Take Your Super as a Lump Sum
You can withdraw super as a lump sum once you’ve retired and met a condition of release. People commonly use lump sums to clear the mortgage, renovate, or fund a long-planned purchase.
A lump sum gives you full control, but it also moves money out of a tax-advantaged environment, and what you do with it can affect Age Pension eligibility. Money withdrawn and held in the bank or investments is assessed differently from money left in super, and large withdrawals reduce what stays invested for the decades ahead.
The mortgage question is the classic lump sum dilemma, and Scott and Phil spent a whole episode on it. Around 40 per cent of people in their late 50s still carry debt, and the spreadsheet often says keep the money in super earning more than the mortgage costs. Phil’s take on the episode: “Financial planning is a funny thing. You’ve got one answer on a spreadsheet, but you’ve got the other answer that takes into account living, breathing people with emotions.” The relief of being debt-free is real, and so is the maths. The episode is worth a listen:
Option 2: Start an Account-Based Pension
An account-based pension is the most common way Australians use super in retirement. You transfer super into a pension account and receive regular payments, a bit like a salary, while the balance stays invested and can keep growing.
The appeal: flexible payment amounts (above a government minimum), continued investment earnings, and for over-60s both the income and the earnings inside the pension account are generally tax-free. The trade-off: the balance moves with markets, and it can run out if withdrawals outpace returns. Once you reach Age Pension age, the balance is also assessable under Centrelink’s means tests.
Option 3: Combine a Lump Sum With a Pension
Many retirees end up with a blend. A common pattern we see is withdrawing a portion as a lump sum for immediate needs and converting the rest into an account-based pension for ongoing income.
For example, someone retiring with $500,000 might take $50,000 as a lump sum for renovations and hold $450,000 in a pension account paying a monthly income.
Please note: All figures, projections and scenarios in this article are approximate and for illustrative purposes only. Individual outcomes will vary based on personal circumstances, investment returns, fees, and current government policy. This is general information, not personal advice.
Option 4: Leave Your Super Where It Is
There is no rule forcing you to touch your super the day you retire. It can stay in accumulation, invested and growing, until you’re ready. This matters more than people realise: before Age Pension age, super left in accumulation is generally not counted in Centrelink’s means tests, a point we unpacked properly in how to retire before 67 without draining your super.
If you’ve reached 60 but are still working, a transition to retirement (TTR) pension lets you draw a limited income (capped at 10 per cent of the balance a year) while working reduced hours. One detail from our podcast episode on preservation age worth knowing: earnings inside a TTR pension are taxed at up to 15 per cent, while a full retirement-phase pension pays zero tax on earnings. As Phil explained on that episode, “Preservation age does not mean you automatically have access to super, but it means you’re of an age where you can start ticking boxes.” If you’re weighing up work and access, see can I still work after accessing my super.producing option.
Check Your Age Pension Position
From 67 you may be eligible for the Age Pension, depending on your income and assets. Current as at August 2026, the maximum rates are $1,200.90 per fortnight for singles (around $31,200 a year) and $1,810.40 per fortnight combined for couples (around $47,100 a year), including supplements. These rates are indexed in March and September each year, so verify current figures with Services Australia.
How you structure your super affects your position under the assets and income tests, sometimes significantly. We covered the current thresholds and the taper maths in how much super can I have and still get the full Age Pension.
Keep Your Super Working Through Retirement
Retirement is not the finish line for your investments. A 65-year-old today may need their money working for another 25 to 30 years, and an account-based pension keeps the balance invested while paying you.
The investment mix inside it still matters. Broadly, conservative options prioritise stability, balanced options target moderate growth, and growth options accept more short-term movement for higher long-term returns. One pattern we see often enough that Scott and Phil dedicated an episode to it: portfolios that become so conservative at retirement that returns barely match inflation, which quietly shortens how long the money lasts. In that episode, a couple with $500K spending $75K a year saw a growth portfolio fund them into their late 90s while a conservative one ran out 15 years earlier. Which mix suits you depends on your circumstances, income needs and comfort with volatility, and it’s a decision worth taking advice on.
Want a rough sense of how your balance, drawdowns and the Age Pension fit together? The free Wealthlab super calculator takes two minutes.
Plan for Longevity and Future Costs
Australians are living longer than ever, which is great news, but it also means the money has to last longer. A plan worth its name accounts for rising healthcare costs, potential aged care expenses, inflation compounding year after year, and a buffer for the unexpected. Even small consistent habits, like easing withdrawals in poor market years and reviewing the plan annually, can add years to how long savings last.
Common Questions About Super After Retirement
Can I leave my super where it is? Yes. Super can stay in accumulation until you’re ready to draw on it. It stays invested, and before Age Pension age it is generally not assessed by Centrelink.
Do I have to take my super all at once? No. Most retirees draw it gradually through an account-based pension, take partial lump sums as needed, or both.
Is my super tax-free after I retire? Generally yes, if you’re 60 or older and your fund is a taxed fund. Both lump sum withdrawals and account-based pension income are usually tax-free from 60, per the ATO.
Can I still contribute to super after retiring? Often yes, if you’re under 75. Most contribution types no longer require a work test under 75, though caps and conditions apply, so check the current rules or get advice.
What’s the difference between a TTR pension and a retirement pension? A TTR pension runs while you’re still working, caps withdrawals at 10 per cent a year, and its earnings are taxed at up to 15 per cent. A retirement-phase pension has no earnings tax and more flexible withdrawals, but requires meeting a full condition of release.
Is professional advice worth it for this decision? The structure and timing choices here interact with tax, Centrelink and how long your money lasts, and small differences compound over a 25 year retirement. Many people handle it themselves; many others find one conversation with an adviser pays for itself. Your call.
Ready to Plan Your Next Chapter?
There is no single right answer to what you should do with your super, only the right structure for your situation, and that usually becomes obvious once the options are laid out against your actual numbers. If you’d like to talk it through, have a chat with us. No pressure, no jargon. Book a free call with the Wealthlab team, take the free retirement quiz for a general snapshot, or read more about our approach to retirement planning. For context on how your balance compares, see how much money most people retire with in Australia.
