A guide to superannuation income streams
Thinking about how you’ll access your super when you retire? A super income stream is a common method of drawing down your retirement nest egg.

Thinking about how you’ll access your super when you retire? A super income stream is a common method of drawing down your retirement nest egg.
What are super income streams?
When you’re eligible and decide to access your super, you usually have the option of taking your money as a lump sum, or use some or all of the money to create an income stream. Or you may choose a combination of the two.
An income stream from super is a way of receiving a regular income using the money you’ve built up in your super. Super income streams can be paid to you by your super fund, a retirement savings account provider and/or a life insurance company.
You may be interested in Canstar’s 2024 Star Ratings and Awards for outstanding value Superannuation funds.

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Sponsored or Promoted products table
- Sponsored or promoted products that are in a table separate to the comparison tables in this article are displayed from lowest to highest annual cost.
- Performance figures shown for Sponsored or Promoted products reflect net investment performance, i.e. net of investment tax, investment management fees and the applicable administration fees based on an account balance of $50,000. To learn more about performance information, click here.
- Please note that all information about performance returns is historical. Past performance should not be relied upon as an indicator of future performance; unit prices and the value of your investment may fall as well as rise.
What are the different types of super income streams?
A super income stream can be account-based or non-account based, according to the Australian Taxation Office (ATO). So what’s the difference between the two and how do they work?
Account-based income stream
An account-based income stream, also known as an account-based pension, is where you use some or all of your super money to set up a separate account that pays you an income. This income is a regular payment – the amount and frequency are decided by you – although it may be subject to certain caps. Any money remaining in your super account continues to be invested.
Super funds commonly offer two income stream products: a transition to retirement income stream, for people gradually moving into retirement, and a retirement income stream from super for people who retire permanently. Which product you choose will depend on your personal circumstances and whether you decide to continue to work or not while you receive your super income stream. Keep in mind, though, that the ATO sets different minimum and maximum withdrawal amounts and different tax concessions for the products.
Non-account-based income streams/annuities
A non-account-based income stream from superannuation does not involve an account balance attributed to you.
An example of a non-account-based income stream is an annuity, which guarantees you an income for a set period of time. You buy an annuity with money from your super and this entitles you to receive a regular income stream that can be guaranteed for life, for your life expectancy, or for a fixed term. The amount of income you receive will depend on how much money you have put towards buying the annuity. Payments are usually made monthly, quarterly, half-yearly or yearly.
What standards must super income streams meet?
The ATO sets out certain standards that both account-based and non-account-based income streams must meet each financial year. The standards include:
- A minimum amount must be paid each year determined by your age. For transition to retirement income streams, a maximum amount also applies.
- Payments must occur at least annually.
- An income stream can be changed into a lump sum only in certain circumstances.
- An income stream can’t be paid to a non-dependent beneficiary after the death of the member.
If the standards are not met, the ATO says the income stream from superannuation will stop for tax purposes and it will consider the fund has not paid an income stream during the year.
Pros and cons of an account-based super income stream
If you’re interested in setting up an account-based super income stream then the Australian Government’s Moneysmart website says you need to consider the pros and cons.
The potential pros include:
- Greater flexibility as you can decide the payment amount (within the minimum and maximum withdrawal amounts prescribed).
- Income stream payments are tax-free from age 60.
- You can choose how your money is invested as you withdraw it.
- You can withdraw lump sums at any time, so long as you meet the criteria for doing so.
Potential cons include:
- Investment earnings are not guaranteed and may fluctuate depending on your choice of investment.
- There’s no guarantee of how long your super income stream will last and you may outlive it.
- Your income stream may impact how much Age Pension you’re entitled to receive.
- The amount of money that can be transferred to a tax-free account-based pension is capped at $1.7 million.
Pros and cons of a non-account-based super income stream/annuity
If it’s a non-account-based super income stream, such as an annuity, that you’re interested in setting up, then the Moneysmart website also says you need to consider the pros and cons.
Potential pros can include:
- You can arrange to buy an annuity that provides an income for your whole life.
- You’re paid a guaranteed income that’s not linked to market performance.
- Annuities bought with super money will be tax-free from the age of 60 (tax may apply if you’re aged 55 to 59)
Potential cons can include:
- You can’t withdraw your annuity money as a lump sum.
- You can’t choose how your money is invested, which could be an issue if you want to invest ethically.
- An annuity may pay less than a product that is market-linked.
When can my super be withdrawn?
Before you can set up a super income stream, you will need to be able to access your super.
The ATO says you can withdraw your super when you turn 65 (even if you haven’t yet retired), or reach preservation age and retire, under the transition to retirement rules. There are only very limited circumstances where you may be able to access your super early. Usually, this would be for specific medical reasons or severe financial difficulty.
Your preservation age
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Date of birth | Preservation age |
---|---|
Before 1 July 1960 | 55 |
1 July 1960 – 30 June 1961 | 56 |
1 July 1961 – 30 June 1962 | 57 |
1 July 1962 – 30 June 1963 | 58 |
1 July 1963 – 30 June 1964 | 59 |
From 1 July 1964 | 60 |
Source: ATO
Compare Superannuation with Canstar
The table below displays some of the superannuation funds currently available on Canstar’s database for Australians aged 30 to 39 with a super balance of up to $55,000. The results shown are sorted by Star Rating (highest to lowest) and then by 5 year return (highest to lowest). Performance figures shown reflect net investment performance, i.e. net of investment tax, investment management fees and the applicable administration fees based on an account balance of $50,000. To learn more about performance information, click here. Consider the Target Market Determination (TMD) before making a purchase decision. Contact the product issuer directly for a copy of the TMD. Use Canstar’s superannuation comparison selector to view a wider range of super funds. Canstar may earn a fee for referrals.


- Performance, fee and other information displayed in the table has been updated from time to time since the rating date and may not reflect the products as rated.
- The performance and fee information shown in the table is for the investment option used by Canstar in rating of the superannuation product.
- Performance information shown is for the historical periods up to 31/05/2024 and investment options noted in the table information.
- Performance figures shown reflect net investment performance, i.e. net of investment tax, investment management fees and the applicable administration fees based on an account balance of $50,000. To learn more about performance information, click here.
- Performance data may not be available for some products. This is indicated in the tables by a note referring the user to the product provider, or by no performance information being shown.
- Please note that all information about performance returns is historical. Past performance should not be relied upon as an indicator of future performance; unit prices and the value of your investment may fall as well as rise.
- Any advice on this page is general and has not taken into account your objectives, financial situation or needs. Consider whether this general financial advice is right for your personal circumstances. You may need financial advice from a qualified adviser. Canstar is not providing a recommendation for your individual circumstances. See our Detailed Disclosure.
- Not all superannuation funds in the market are listed, and the list above may not include all features relevant to you. Canstar is not providing a recommendation for your individual circumstances.
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Performance and Investment Allocation Differences
- Fee, performance and asset allocation information shown in the table above have been determined according to the investment profile in the Canstar Superannuation Star Ratings methodology.
- Some providers use different age groups for their investment profiles which may result in you being offered or being eligible for a different product to what is displayed in the table. See here for more details.
- Australian Retirement Trust Super Savings’ allocation of funds for investors aged 55-99 differ from Canstar’s methodology – see details here.
- The Australian Retirement Trust Super Savings (formerly Sunsuper for Life) product may appear in the table multiple times. While you will not be offered any single investment option, this is to take into account the different combinations of investment options Australian Retirement Trust may apply to your account based on your age. For more detail in relation to the Australian Retirement Trust (formerly SunSuper for Life) product please refer to the PDS issued by Australian Retirement Trust for this product.
- Investment profiles applied initially may change over time in line with an investor’s age. See the provider’s Product Disclosure Statement and TMD and in particular applicable age groups for more information about how providers determine their investment profiles.
How much do I need to withdraw from my super income stream?
There is a minimum you need to withdraw each year from your super income stream, says the ATO. The actual amount depends on your age and is calculated as a percentage of your account balance.
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Age | Minimum % withdrawal |
---|---|
Under 65 | 4% |
65-74 | 5% |
75-79 | 6% |
80-84 | 7% |
85-89 | 9% |
90-94 | 11% |
95 or over | 14% |
Source: ATO
For retirement income streams there is no maximum amount, aside from the balance of your super account, which you can withdraw. For transition to retirement income streams, the maximum amount you can withdraw is 10% of the account balance per year before you reach the retirement phase.
Does a super income stream impact the Age Pension?
A super income stream may impact your entitlement to the Australian Government’s Age Pension and how much you may receive. Services Australia (formally Centrelink) works out your Age Pension benefit by looking at how much income you get (income test) and how much your assets are worth (assets test). If your income or assets are above certain limits, your pension may be reduced.
When does a super income stream end?
One of the most common ways for a super income stream to end is when the capital (i.e. the money) runs out, says the ATO. Other ways include when the income stream does not meet the super standards, when the income stream is fully changed to a lump sum amount or when you die.
In the event of your death, if there is money still remaining in your income stream account, this will be paid to your beneficiaries – if you’ve nominated any – or to your estate. Moneysmart notes that this super money may be paid as a lump sum. If you’ve nominated a partner or a dependant as a reversionary beneficiary they’ll continue to receive your payments as an income stream until the money runs out.
If the reversionary beneficiary is a child, they will normally be able to receive payments until they are 25 and then they’ll receive a lump sum if there is any money left.
When considering any income stream option you should read carefully any relevant documents including any product disclosure statement (PDS) and target market determination (TMD). You should also consider getting some independent financial advice.
Cover image source: Rawpixel.com/Shutterstock.com
This article was reviewed by our Editor-in-Chief Nina Rinella before it was updated, as part of our fact-checking process.

- What are super income streams?
- What are the different types of super income streams?
- What standards must super income streams meet?
- Pros and cons of an account-based super income stream
- Pros and cons of a non-account-based super income stream/annuity
- When can my super be withdrawn?
- How much do I need to withdraw from my super income stream?
- Does a super income stream impact the Age Pension?
- When does a super income stream end?
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