For many Australians, superannuation is one of the biggest assets they’ll ever own — and understanding what happens to your super when you retire is essential to making the most of it.
At MLS Financial Penrith, we help clients navigate this transition every day, turning super savings into reliable income that supports the lifestyle they’ve worked hard for. Here’s what you need to know about how your super works once you stop working.
1. You Don’t Have to Take It All Out at Once
When you retire, your super doesn’t automatically get paid out in one lump sum. You have options for how and when to access your super, depending on your age, retirement status, and personal goals.
Most people choose one of the following approaches:
- Start an income stream (account-based pension): You keep your money invested in super and draw a regular income from it.
- Take a lump sum: You can withdraw some or all of your super as cash.
- Combine both: Use part as an income stream and part as a lump sum for major expenses, such as paying off debt or home renovations.
A financial adviser can help determine what mix best suits your circumstances, ensuring your money lasts for the long term.
2. Moving from Super to a Pension Phase
When you retire and start drawing income, your super balance typically moves from the accumulation phase to the pension phase.
The key difference? Tax.
- In accumulation phase, your earnings inside super are taxed at 15%.
- In pension phase, investment earnings are tax-free, up to the transfer balance cap.
This is one of the biggest financial advantages of retirement planning — but it’s important to manage your balances carefully to stay within the rules and maximise tax-free income.
3. You Can Keep Growing Your Super Before and After Retirement
Even if you’re approaching retirement, you may still be able to add to your super through strategies such as:
- Salary sacrifice contributions
- After-tax (non-concessional) contributions
- Downsizer contributions (if you’ve sold your home and meet the age requirements)
And if you’re easing into retirement, a Transition to Retirement strategy may allow you to access some of your super while you’re still working, giving you flexibility without fully retiring.
4. Your Super Can Provide a Lifetime Income
With the right structure, your super can provide ongoing income for decades. An account-based pension offers flexibility — you choose how much to draw each year — while annuities can provide a guaranteed income for a set period or for life.
At MLS Financial Penrith, we help clients find the right balance between flexibility, security, and growth, so your retirement income supports you throughout your life, not just in the early years.our current super setup is the best fit, it’s worth reviewing your superannuation fund types Penrith with a qualified adviser.
5. What Happens When You Pass Away
If you still have super when you pass away, it doesn’t automatically form part of your will — it’s paid according to your superannuation death benefit nomination.
You can nominate:
- Your spouse or partner
- Your children
- A dependent
- Your estate
Getting this right is essential for ensuring your super goes to the right people in the most tax-effective way. Your adviser can help review your nominations as part of your estate planning.
Final Thoughts
Superannuation is designed to support you through retirement, not just end when you stop working. With the right advice, your super can provide steady income, tax advantages, and peace of mind for years to come.
If you’re approaching retirement and want to understand what happens to your super when you retire, speak with MLS Financial Penrith. Our local advisers can help you structure your income, reduce tax, and make the most of your retirement savings.
Written by:
Adrian Guy – BBus (Finance & Economics), MLS Financial
Disclaimer:
This information is general in nature and does not take into account your personal objectives, financial situation or needs. You should consider speaking to a qualified financial planner before making any financial decisions. MLS Financial and Infocus Securities Australia Pty Ltd do not accept responsibility for actions taken based on this content.