Understanding different types of retirement pensions

We explain the difference between the government's Age Pension, a transition to retirement pension, and an account-based pension.

If you’ve heard the term ‘pension’ being thrown around, you may have picked up that there are many types of pensions available in Australia.

We explain the difference between three commonly used pensions, including the government’s Age Pension, a transition to retirement pension, and an account-based (or allocated) pension, so you’re across how they work and what might be right for you.

The government’s Age Pension

The Age Pension is a government benefit paid to eligible Australians that have reached their Age Pension age.

You can check out the age eligibility for when you are able to access the Age Pension below.

Date of birth

Age Pension eligibility age

Before 1 July 1952         

65 years

1 July 1952 - 31 December 1953

65 years and 6 months

1 January 1954 - 30 June 1955

66 years

1 July 1955 - 31 December 1956

66 years and 6 months

From 1 January 1957

67 years

Currently, to be eligible for a full or part Age Pension, you must satisfy an income test and an assets test, as well as other requirements1.

The value of various assets you have, and any income you receive, will determine whether you’re eligible and what amount of money you’ll receive in Age Pension payments.

The maximum Age Pension rate for a single person is currently $894.40 a fortnight and for a couple, it’s currently $1,348.40 a fortnight2.

Transition to retirement pension

A transition to retirement pension (TTR) is something different altogether.

It’s a type of pension that enables you to access some of the superannuation you’ve saved via periodic payments, even if you’re still working and receiving an income from your employer or business.

To access your super this way, you must however have reached your preservation age, which will be between 55 and 60, depending on when you were born.

See the table below to work out what your preservation age is.

Date of birth

Preservation age

Before 1 July 1960


1 July 1960 - 30 June 1961


1 July 1961 - 30 June 1962


1 July 1962 - 30 June 1963


1 July 1963 - 30 June 1964


1 July 1964 and onwards


Accessing a TTR pension may provide you with some useful opportunities. For example, you could either work less, or work the same hours while sacrificing some of your salary into super. In both cases, you can use your TTR pension to supplement any reduction in your take-home pay.

Note, you can only withdraw between 4% and 10% of your super savings each financial year with a TTR pension and you can’t make lump sum withdrawals unless you meet certain conditions of release.

For further information regarding how TTR pensions are taxed and what other things you’ll need to consider, check out our article – How do transition to retirement income streams work?.

Account-based pension

An account-based (or allocated) pension is an account made up of money you’ve accumulated in super, which allows you to draw a regular income once you have met one of superannuation’s conditions of release – for example, when you have reached your preservation age (see table above) and retired from the workforce.

Typically, there’s no limit to how much you can withdraw from an account-based pension, so in addition to receiving periodic payments, you can withdraw some or all your money as a lump sum.

Each year however, you’ll need to withdraw a minimum amount and this figure will be based on your age and will be a percentage of your account balance. The table below shows you how much.


Yearly minimum withdrawal

55 - 64


65 - 74


75 - 79


80 - 84


85 - 89


90 - 94




If you’re converting your super into an account-based pension to derive an income in retirement, note you’re restricted to transferring a maximum of $1.6 million into your pension account, not including subsequent earnings.

For further information regarding the tax treatment of account-based pensions, check out our article - Making sense of account-based pensions.

More information

Contact Centrelink or speak to your adviser about what might be right for you. If you don’t have an adviser but would like to speak to one, call us on 131 267 or use our find an adviser search function to locate one near you.

Other articles that might provide you with additional tips include:


1-2 Department of Human Services – Age Pension (Eligibility and payment rates)

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It’s important to consider your particular circumstances and read the relevant Product Disclosure Statement or Terms and Conditions before deciding what’s right for you. This information hasn’t taken your circumstances into account.

This information is provided by AMP Life Limited. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you. All information on this website is subject to change without notice.