Retirement income options: how to turn your super into income

If you’re approaching retirement, it’s completely normal to feel unsure where to start. 

You might hear terms like pensions and income streams and wonder how they all fit together. 

The key thing to understand is that your super doesn’t automatically turn into income. 

Instead, there are different ways to access and structure it over time, depending on whether you’re still working, fully retired or looking for more certainty in your income. Understanding these options can help you feel more confident about what retirement might look like in practice. 

How does the Government Age Pension fit alongside your super?

The Age Pension is a Government payment that may form part of your overall retirement income, depending on your eligibility.

It’s designed to support Australians in retirement, particularly those who don’t have enough savings to fully fund their lifestyle. Whether you receive it – and how much – depends on factors like your age, residency status, whether you’re single or part of a couple, and your income and assets.

Generally, you need to:  

• be at least 67 years of age 

• be an Australian resident and present in the country on the day you submit your claim 

• have lived in Australia for at least 10 years and continuously for at least five of those years 

• meet income and assets assessment requirements, which helps determine how much you may receive 

• For many people, the Age Pension isn’t their only source of income. Instead, it often works alongside super, helping to cover essential costs while other income streams provide more flexibility.

What is a transition to retirement (TTR) account? 

A transition to retirement (TTR) account allows you to access some of your super while you’re still working, whether that be full time, part time or casually. It’s available from age 60 and is designed to help you ease into retirement rather than stopping suddenly. 

For example, you might reduce your working hours and use your super to supplement your income. Or you might keep working while adjusting how your income is structured – for example, contributing more into super while drawing a regular payment from your TTR account. 

If you’re aged 60 or over, payments you receive from a TTR account are generally tax free. Investment earnings within a TTR account are typically taxed at 15% – the same as in super, until it moves into retirement phase. A higher tax rate applies to account balances over $3 million. There are limits on how much you can withdraw each year, which helps preserve your balance until you fully retire. Access to lump sums is also generally restricted during this phase. 

Once you reach age 65, or earlier if you tell your superfund you’ve retired or stopped working in some way, you can choose to move your TTR account into retirement phase (where your super is being used to pay an income in retirement, rather than being saved while you’re working) and your investment earnings usually become tax free.  

In practice, a TTR is less about retirement itself and more about making the transition into retirement feel more gradual and manageable.

How does an account-based pension work?

An account‑based pension, also known as an allocated pension or flexible retirement income stream, is one of the most common ways Australians turn their super into income once they retire. 

Instead of withdrawing your super as a lump sum, your balance remains invested and you draw a regular income from it over time. Each year, you must withdraw a minimum amount based on your age, but you can take more if you need to, including lump sums as often as you like.

The table below shows you the yearly minimum withdrawal amounts: 

Minimum withdrawal rates (standard rates as at June 2026; ATO) 

The main advantage is flexibility. You can adjust your income to suit your lifestyle, spending needs or changing circumstances, while your remaining balance stays invested. Plus, you also have the flexibility to decide how it’s invested.

The trade‑off is that your income isn’t guaranteed to last for life. Your income only lasts as long as there is an account balance. Because your balance is being drawn down to pay you an income and remains exposed to investment markets, it can rise or fall over time depending on performance, the investment options you’re invested in and how much you withdraw. AMP's offering here is the AMP Flexible Retirement Income.

Overall, this kind of income stream offers control and flexibility, but it requires thoughtful management over the long term.

What is a lifetime retirement income stream?

A lifetime retirement income stream (also known as a lifetime pension or lifetime income product) is designed to provide an income for life.  

Some lifetime income products, such as AMP’s Lifetime Retirement Income, can maximise your retirement income by increasing your eligibility for the Government Age Pension, meaning potentially more Age Pension to add to your income.

Unlike a flexible retirement income stream, which draws down a balance over time, this type of income stream focuses on providing more certainty. It’s designed to keep paying regardless of how long you live, which can help reduce the risk of running out of money later in retirement. 

Some lifetime income streams, such as traditional annuities, offer a fixed payment that stays the same each year. These can provide greater certainty about your income, but may offer less flexibility and limited access to your money once set up. Others – including AMP’s approach – are more flexible. With these, your income is typically set for each financial year, but can change over time depending on factors like investment performance.

This approach comes with trade-offs. You may have less access to your money, and there may be limits on withdrawals or what can be left to others. Because payments continue for life and your income can change over time, the total amount you receive could be less than what you initially invested. 

Because of this, it often plays a different role. Rather than replacing flexible income sources, it’s typically used alongside them – providing a more stable income base, while other streams allow for greater access and adaptability.

For many, this combination creates a balance between certainty and flexibility across different stages of retirement. 

How do these work together?

One of the biggest misconceptions about retirement is that you need to choose a single option. 

In reality, most people use a combination of income streams over time.

You might start with a TTR pension while you’re still working, move to a flexible retirement income stream once you retire, and receive the Age Pension if you’re eligible. Some people also include a lifetime retirement income stream to add more certainty to part of their income. 

This mix can help you balance different needs – giving you access to your money when you need it, while also helping provide stability over the longer term.

The goal isn’t to find one perfect solution. It’s to understand how these options can work together to support the way you want to live in retirement.

Quick comparison of retirement income options  

What should I do next? 

A great next step is to see how these income options could come together for you. Tools like AMP Super’s Retirement Simulator can help you explore:

• how long your super will last
  

• what income it could provide

• Age Pension eligibility

• how flexible and lifetime retirement income streams could work together

From there, you can start to test different scenarios and see how small decisions today could shape your retirement over time. 

AMP Super members also have access to Digital Financial Advice for no extra fees. Try out our Retirement Planner by entering details about your assets, loans, and retirement goals. It shows how your super could turn into a retirement income over time, with a recommended strategy you can adjust to suit you. You’ll also get a simple, easy‑to‑follow action plan so you know what to do next. If you prefer talking things through, you can also speak with AMP’s experienced financial advisers, who can help explain your options and answer your questions.