7 Superannuation Tips No One Tells You About Retiring in Australia

Most Australians think retirement begins at 60, but the real story starts when you understand how super, tax-free income, and Centrelink rules really work. Here are the insider tips people don’t always tell you.

Tip 1: You can retire at 60... but the Age Pension won’t start until 67

Here’s what catches many Australians off guard: you can access your superannuation when you hit 60, but you won’t receive the Age Pension until 67.

That seven-year gap can create a serious income shortfall if you’re not ready for it.

What to do:
Plan ahead for your “in-between” years. Use a combination of superannuation income streams, part-time work, or tax-effective investments to bridge the gap until pension eligibility kicks in.

Insider tip: The right income mix can help you qualify for the maximum Age Pension later, without reducing your lifestyle today.

Tip 2: How you access your super determines how long it lasts

Not all super withdrawals are created equal. When you reach 60, you’ll face three main options — each with hidden trade-offs:

• Lump sum: Simple and flexible, but once it’s out, it’s up to you to manage (and resist overspending).
• Account-based pension: Converts your super into a regular income stream while keeping funds invested — giving you growth and income together.
• Structured products or annuities: Offer guaranteed income for peace of mind, but less flexibility and often lower returns.

Insider tip: The wealthiest retirees often combine all three, using an account-based pension for stability and small lump sums for flexibility when needed.

Tip 3: Super income after 60 is tax-free... but there’s a catch

Yes, you read that right. Once your super is in retirement phase, both your income and investment earnings can be completely tax-free for amounts under $3million. The government has announced that from 1 July 2026, superannuation balances over $3 million will attract a higher tax rate on earnings above that threshold.

This change targets high-balance super members and does not affect the majority of Australians.

However, if your balance is approaching that level, it’s worth discussing strategies such as:

• Diversifying assets across multiple structures (inside and outside super)
• Reviewing whether you should transition some assets out of super before 2026
• Ensuring your transfer balance cap and estate planning are tax-efficient

If you leave any funds in your accumulation account, earnings on those funds are still taxed at 15%.

Insider tip: Work with your adviser to move funds into pension phase strategically to maximise your tax-free threshold while staying under the cap.

Tip 4: Minimum drawdowns are designed to force you to spend

One of the least-understood superannuation rules is the government’s minimum drawdown rate. The percentage of your pension balance you’re required to withdraw each year once you start an income stream. These rules are designed to make sure retirees actually use their super for retirement rather than leaving it untouched indefinitely in a tax-free environment.

If you’re under 65, you must withdraw at least 4 percent of your balance each financial year. Between 65 and 74, the rate rises to 5 percent, and from 75 to 79, it increases again to 6 percent. Once you reach 80 to 84, you’ll need to take out 7 percent, followed by 9 percent between 85 and 89, 11 percent between 90 and 94, and a substantial 14 percent once you’re 95 or older.

These rates might sound technical, but they have real-world consequences. A higher drawdown can mean more money in your pocket now, yet it also shortens how long your savings last. Conversely, sticking to the minimum helps preserve your balance for longer, keeping your income steady well into the later years of retirement.

Insider tip: You can always withdraw more than the minimum, but taking too much too soon can erode your super faster than you expect. The key is finding the sweet spot that has enough flexibility to enjoy life now while ensuring your funds can comfortably support you in the decades ahead.

Tip 5: Centrelink’s deeming rates can quietly shrink your pension

The Centrelink assets test and deeming rates are where most retirees lose out — not because they have too much money, but because their income is assumed to be higher than it actually is.

Even if your investments earn less, Centrelink “deems” that they earn a fixed rate and reduces your pension accordingly.

Smart move:
Restructure your assets. For example, holding more in your family home (which is exempt) and less in assessable financial assets can increase your Age Pension entitlement.

Insider tip: Many retirees miss out on thousands each year simply because they don’t know how deeming rates apply to their portfolio.

Tip 6: Mixing super income with the Age Pension can boost your total income

Here’s the golden rule of retirement planning: don’t rely on one income source.

By combining your superannuation income stream with a part Age Pension, you can create a stable and tax-efficient income that lasts longer.

Examples include:

• Drawing tax-free income from super while keeping assets low enough to qualify for part pension benefits.
• Allocating assets between spouses to reduce the assessable amount for Centrelink.
• Timing your withdrawals so your pension top-up keeps you under the income test limit.

Insider tip: A hybrid income structure - part super, part pension - often delivers the best balance of security, flexibility, and tax savings.

Tip 7: The biggest mistake retirees make isn’t financial it’s emotional

Many retirees panic when markets dip or overreact to news about super rule changes. Selling at the wrong time or withdrawing too much early can have long-term consequences.

Smart retirees:

• Review their superannuation annually.
• Adjust drawdowns in response to markets.
• Keep 2–3 years of income in cash or term deposits to avoid selling investments in downturns.

Insider tip: Consistency beats timing. Long-term growth and disciplined withdrawals matter more than reacting to short-term fluctuations.

Final Thought:

With the federal government’s new superannuation tax measures coming into effect from 1 July 2026 including higher taxes on balances over $3 million, it’s more important than ever to review your strategy.

Ledgersmith continually monitors legislative updates to help clients adjust their retirement income strategies and protect their wealth in line with the latest age pension rules and tax frameworks.

Talk to the Ledgersmith Team

Your superannuation is more than a balance, it’s the tool that funds your freedom.
Understanding the real rules (and the unspoken ones) helps you retire with confidence, flexibility, and peace of mind.

Every retirement story is different and so is every super strategy.

👉 Book your free consultation here - https://ledgersmith.com.au/contact
Let’s build a plan that makes your super work smarter and keeps your lifestyle secure.