Taking your super as a lump sum might be tempting, but it won't be the best option for everyone.
You've probably spent much of your working life accumulating super. So, when the time comes and you're able to access it, you might be wondering whether you’d be better off taking the money as a lump sum, regular income, or even a bit of both.
To help you make a more informed decision, we’ve pulled together what options are on the table and some tax implications worth considering.

Taking your super as a lump sum
If you’re thinking about taking your super as a lump sum, consider some of the following points.
Making your money last
A lump sum could help you to pay off your home loan or other outstanding debts, but you also need to think about what you’ll live on if you have no super left.
The Age Pension may be one option, if you’re eligible for it, but if you’re pinning your hopes entirely on government support, you should also consider the sort of lifestyle it will fund.
March 2021 figures from the Association of Superannuation Funds of Australia (ASFA) show a 65-year-old couple retiring today would require a suggested annual income of around $62,828 to fund a ‘comfortable’ lifestyle in retirement, assuming both people are relatively healthy and own their home outright1.
By comparison, the maximum Age Pension rate for a couple is currently $37,341 annually2.
Possible tax implications
If you’re going to take a lump sum you should also look into tax rules. If you’re over age 60, super money you access will generally be tax free, but if you’re under 60, you might have to pay tax on your lump sum.
Another thing to think about is if you invest the money, depending on where you put it, you may be taxed on the interest you make, or possibly the capital gain. Whether taking your super as a lump sum is tax-effective, or not, will depend on your individual circumstances.
Taking your super via regular income payments
If you’re thinking a regular income in retirement would suit you more, an account-based (or allocated) pension could be a tax-effective option, noting it’s based on the super you’ve saved to date, so won’t guarantee an income for life.
If you’re converting your super into an account-based pension, there will also be limits on how much you can transfer.
Below are some other things to consider.
Having access to your money
Typically, there is no limit to how much you can withdraw from an account-based pension. So, in addition to receiving periodic payments, you can choose to withdraw some or all of your money as a lump sum.
Each year however, you’ll need to withdraw a minimum amount. This amount is calculated based on your age and will be a percentage of your account balance each year.
Possible tax implications
By moving your super money into an account-based pension, your money will not be exposed to the tax rules that apply to money held outside of super. This means:
- You won’t be taxed on investment earnings within your fund
- If you’re between your preservation age and age 60, the taxable portion of your account-based pension will be taxed at your marginal income tax rate, less a 15% tax offset
- From age 60 you won’t pay tax on account-based pension payments you receive
Whether an account-based pension is tax effective will depend on your individual circumstances.
Investment control and earnings
You can generally choose from a range of investment options and an investment manager will make the day-to-day investment decisions on your behalf. A broader range of investments may also be available depending on the type of account-based pension you have.
Keep in mind, investment returns from an account-based pension are tied to movements in investment markets, so can go up and down.
Weighing up your options
There’s a lot to think about when deciding how you’ll use your super. To determine what’ll work best for you, speak to your adviser or see if there’s one you may be able to contact in your area.
For more information about account-based pensions and some of the other pension types out there, check out our article - Types of retirement pensions explained.
1 The ASFA Retirement Standard March 2021 - table 1
2 Services Australia Age Pension How much you can get – table 1, 20 August 2021
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Any advice and information is provided by AWM Services Pty Ltd ABN 15 139 353 496, AFSL No. 366121 (AWM Services) and is general in nature. It hasn’t taken your financial or personal circumstances into account.
The retirement health check is a general advice conversation only. It is provided by AWM Services Limited (AWM Services) ABN 15 139 353 496, AFS Licence No. 366121 (AWMS) to eligible members of the AMP Super Fund. AWM Services is a wholly-owned subsidiary of AMP.
It’s important to consider your particular circumstances and read the relevant product disclosure statement, Target Market Determination or or terms and conditions, available from AMP at amp.com.au, or by calling 131 267, before deciding what’s right for you.
You can read our Financial Services Guide online 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. You can also ask us for a hard copy. All information on this website is subject to change without notice. AWM Services is part of the AMP group.