How can you access your retirement savings?

May 2024

Key takeaways

  • Insight into the various pros and cons of each of the three main options for your retirement savings – account-based pension, lump sum, or a combination of the two.


As retirement approaches, we are faced with important decisions regarding our retirement savings. With the aim of ensuring financial stability throughout your retirement, it’s a good time to weigh up the pros and cons of the various options available to you.

The common choices for accessing super are an income stream from an account-based pension, withdrawing your super as a lump sum, or a combination of both, so let’s look at each of these options to help you make informed decisions about your financial future.


Option 1: Access super as an income stream

You can access your super as a regular income stream such as an account-based pension which is an account-based pension which provides you with regular payments from your super or retirement savings.

With an account-based pension, you have flexibility in managing your retirement income. When you reach preservation age, you can choose to transfer a portion - or all - of your super savings into an account-based pension. From 1 July 2024, the preservation age for everyone will be 60.

The pension payments are calculated based on the account balance, your age and government regulations. Unlike traditional annuities or defined benefit income streams which have fixed payments, the amount received from an account-based pension can vary depending on your needs and withdrawals, subject to the minimum pension payment requirement.


  • Regular income: One of the most significant advantages of an account-based pension is the payment of regular income, which can provide you with financial stability and peace of mind.
  • Tax benefits: Income from an account-based pension is tax-free for those aged 60 and over, making it an attractive option from a taxation perspective.
  • Flexibility: You have the flexibility to adjust your income payments according to your needs and lifestyle choices, providing a level of control over your finances.


  • Market volatility: Since account-based pensions are usually invested in financial markets, you face the risk of market volatility affecting the value of your pension balance. Economic downturns can lead to decreases in account balances and income payments.
  • Minimum pension payment requirements: The government mandates minimum pension payments based upon your age, which may not meet your financial preferences.


Option 2: Taking your super as a lump sum

Another option available to retirees is to withdraw your super as a lump sum payment - accessing your retirement savings as a lump sum, rather than through periodic payments such as a pension.

Typically, you can withdraw your super as a lump sum when you meet specific conditions, such as reaching preservation age and retiring or ceasing employment after the age of 60 or attaining age 65.

This option provides immediate access to a significant portion of retirement savings, but it also comes with its own set of pros and cons.


  • Immediate access to funds: Taking super as a lump sum provides you with immediate access to a substantial amount of money, which can be used for various purposes, such as paying off debts, funding large expenses, or investing in other assets.
  • Flexibility: You have the freedom to manage your lump sum as you see fit, whether it's through investments, savings, or spending according to your priorities and goals.
  • Potential for higher returns: By investing the lump sum wisely, you may have the opportunity to achieve higher returns compared to the returns generated by an account-based pension, depending on market conditions and investment choices.


  • Risk of overspending: Without the discipline imposed by regular income payments, you may be tempted to overspend or mismanage your lump sum, potentially leaving you vulnerable to financial challenges later in retirement.
  • Tax implications: Once you take a lump sum out of your super account, it is no longer considered to be super benefits. If you subsequently invest that money, earnings on those investments are not taxed as super and may need to be declared in your tax return.
  • No regular income: Unlike an account-based pension, taking super as a lump sum does not provide you with a regular income stream, which could pose a risk if the lump sum is depleted prematurely.


Option 3: A mix of both

For many retirees, a balanced approach that combines elements of both options may offer the best of both worlds. By blending an account-based pension with lump sum withdrawals, you can enjoy the benefits of regular income payments whilst also having access to your super as lump sums. This can be handy when you need to cover a large expense, such as a new car or travel.


  • Income security: By maintaining an account-based pension, you can receive a regular income stream payments for essential expenses whilst having the flexibility to access additional funds when needed.
  • Tax efficiency: A strategic combination of account-based pension income which benefits from tax free earnings and lump sum withdrawals can help you minimise your tax liabilities while maximising your overall retirement savings.
  • Adaptability: A mixed approach enables you to adapt to changing financial circumstances and market conditions, which may provide a higher level of financial resilience and flexibility.


  • Complexity: Managing both an account-based pension and withdrawing lump sums can add complexity to your financial affairs, requiring careful planning and ongoing monitoring.
  • Potential for overspending: Without careful budgeting and financial discipline, you may face the risk of overspending or going through your retirement savings prematurely.
  • Investment risk: You must carefully manage the investment of both your account-based pension and lump sum (should you choose to invest it) to mitigate the risk of market volatility and ensure the longevity of your retirement savings.



The choice between accessing your pension as a regular income stream, as a lump sum, or opting for a combination of both options, is a significant decision that requires careful consideration of your individual circumstances, preferences, financial goals and your needs.

While each option offers its own set of advantages and disadvantages, seeking professional financial advice can help you to tailor your approach to meet your needs and aspirations.

Ultimately, the key to a successful retirement lies in making informed choices and planning wisely for the future.


Important Information and disclaimer

This information is provided by Plum Super and issued by NULIS Nominees (Australia) Limited ABN 80 008 515 633, AFSL 236465 (NULIS) as Trustee of the MLC Super Fund ABN 70 732 426 024 (RSE Licensee). NULIS is part of the Insignia Financial Group of companies comprising Insignia Financial Ltd (formerly IOOF Holdings Ltd) ABN 49 100 103 722 and its related bodies corporate (Insignia Financial Group). Plum Super is part of the MLC Super Fund. The information contained in this communication is general in nature and does not take into account your employees’ personal objectives, financial situation or needs. Because of that, before acting on any of this information your employees should consider whether it is appropriate to their objectives, financial circumstances and needs. We recommend your employees obtain financial advice tailored to their own personal circumstances. Your employees should not rely on this information to determine their personal tax obligations. We recommend your employees consult a registered tax agent for this purpose. While care has been taken in the preparation of this information, NULIS nor any member of the Insignia Financial Group accept responsibility for any loss or liability incurred by you in respect of any error, omission, or misrepresentation in the information in this communication.