How to start a super pension and what to consider first

After working for decades to build your superannuation, the day finally arrives when you can say goodbye to the nine-to-five and turn your super into a reliable source of retirement income. Depending on your account balance, a super pension can be used to supplement the Age Pension or replace it entirely.

The most common type of super pension, also known as a retirement income stream, is a simple account-based pension but there are other pension products outlined later in this article.

You can set up a simple account-based pension in a way that suits you, with the amount and frequency of payments a matter of choice, with one proviso. You must withdraw at least a minimum percentage of your account balance annually, and that percentage increases as you age.

There is a limit on how much you can transfer into retirement phase, called the transfer balance cap (currently $2.1 million, but if you’ve already started a pension your personal cap may be lower). If you exceed your cap you must pay additional tax and remove the excess from the retirement phase, transfering it back into an accumulation account or out of super.

How do I start a super pension?