Asset Types in Canwi
Account-Based Pension
An account-based pension (also called an allocated pension or retirement income account) turns your accumulated super into a regular income stream once you reach preservation age and meet a condition of release. It continues until your super balance runs out - it does not guarantee an income for life.
Accumulation vs pension
The two phases of superannuation. You buy a pension with your accumulated balance.
Phase 01
Accumulation
Working life. Your balance grows.
- Earnings:
- taxed at 15% inside the fund
- Capital gains:
- 15% in accumulation - reduced to 10% if the fund has owned the asset for 12 months or more
- Access:
- preserved until a condition of release
Buy a pension
Phase 02
Pension
Drawdown. Income & lump sums.
- Earnings:
- 0% tax inside the fund
- Income from age 60:
- generally tax-free
- Drawdown:
- minimum % by age, no maximum
The transfer balance cap limits how much you can move into pension phase.
How an account-based pension works
With an account-based pension, you can usually choose:
- how much super you move into pension phase (subject to the transfer balance cap)
- how much income you take each year (subject to minimum withdrawal rules)
- how often you get paid
- how you invest the money remaining in the account
How your money is invested
Your fund typically offers a range of investment options - for example cash, shares, property, bonds, or a mix. Investment returns affect both the income you can draw (subject to the minimum) and how long the account lasts.
Minimum amount to withdraw
You must withdraw at least a minimum percentage of your Account Based Pension account balance each year. The minimum depends on your age and your balance on 1 July. You can withdraw more than the minimum at any time.
| Age at 1 July | Annual payment as % of account balance |
|---|---|
| Under 65 | 4% |
| 65-74 | 5% |
| 75-79 | 6% |
| 80-84 | 7% |
| 85-89 | 9% |
| 90-94 | 11% |
| 95+ | 14% |
For more detail from the Australian Government, see MoneySmart's guide to account-based pensions.
Related terms
See it in your plan
Canwi models Australian tax, super, and pension rules so you can explore decisions like this in a full financial plan.