Retirement planning in Adelaide: where to start
If you’re searching for retirement planning advice in Adelaide, you’re likely facing some version of the same question: “Will my money last?”
For most Adelaide professionals and business owners between 55 and 70, wealth sits in a predictable combination—superannuation, the family home, and sometimes a practice or business that’s taken decades to build. Converting these assets into a reliable retirement income stream requires more than just opening a pension account. It requires a plan that considers tax, Centrelink rules, investment strategy, and for business owners, the regulatory obligations that can affect both the timing and value of an exit.
This article covers the practical mechanics of account-based pensions—the most common vehicle for turning super savings into retirement income—and addresses broader retirement planning considerations specific to Adelaide residents and business owners.
Common concerns we hear from Adelaide retirees and pre-retirees:
“Will my super last if I retire at 65 and live into my 90s?”
“Can I still help the kids with a house deposit without running out of money myself?”
“What if I sell my business or practice in 2026–2028—how does that affect my super and pension?”
“How do I coordinate my account-based pension with the Age Pension?”
Account-based pensions are typically the main mechanism for turning super into regular income. But they don’t exist in isolation. For Adelaide business owners in regulated sectors—legal practices, accounting firms, real estate agencies, remittance services, and gaming venues—retirement planning also means ensuring compliance obligations are sorted before any sale or succession.
The examples throughout this article reference South Australian conditions: property prices in suburbs like Norwood and Glenelg, Adelaide’s cost of living, and the reality that many local professionals are navigating both financial and regulatory considerations as they approach retirement.
What is an account-based pension? (in plain English)
An account-based pension is the standard way Australians convert super into a flexible retirement income stream once they reach preservation age and retire, or turn 65.
The terms “account-based pension,” “allocated pension,” and “account-based income stream” all refer to essentially the same product under current rules. When you start one, your super moves from the accumulation phase into the pension phase. Your money stays invested, but instead of adding to it, you begin drawing a regular income from the balance.
Key characteristics:
Your super fund transfers your balance into a pension account
The funds remain invested according to your chosen strategy
You receive regular payments (monthly, quarterly, half yearly, or annually)
You must withdraw at least a minimum amount each year
The pension lasts only as long as your money lasts—it is not guaranteed for life
This last point is critical. Unlike a lifetime annuity (which guarantees payments until death but offers less flexibility), an account-based pension can run out if you withdraw too much, live longer than expected, or experience poor investment returns.
Simple example: An Adelaide couple, both aged 66, have combined super of around $900,000. They’ve wound back work and want to start drawing income. They each open an account-based pension, giving them flexibility to adjust their income as needed while keeping their super stays invested for potential growth.
How an account-based pension works for Adelaide retirees
Starting an account-based pension involves a few practical steps. Here’s how the process typically works:
Step 1: Meet a condition of release
You can access your super as a pension once you satisfy a condition of release. The most common conditions are:
Reaching preservation age (between 55 and 60, depending on your birth year) and permanently retiring
Turning 65, regardless of work status
Reaching preservation age and starting a transition-to-retirement pension while still working
Step 2: Request your super fund to start a pension
You complete the required paperwork with your fund (or SMSF trustee if you have a self managed super fund), specifying:
How much of your account balance to transfer to pension phase
Your investment option(s)
Payment frequency (monthly, quarterly, half yearly, or annually)
Payment amount (at least the required minimum)
Step 3: Start receiving regular income payments
Once established, your pension account pays you the nominated amount on your chosen schedule. You can usually adjust the payment amount (above the minimum) and frequency as your needs change.
Flexibility for one-off expenses:
Most account-based pensions allow you to take additional lump sum withdrawals for major expenses—whether that’s home repairs, private surgery, or an extended overseas trip. Just be aware that large early withdrawals reduce the capital value and can significantly shorten how long your pension lasts.
Transfer balance cap:
There’s a limit on how much super you can transfer into the tax free pension phase. As at 1 July 2023, the transfer balance cap is $1.9 million per person. Any super above this amount must remain in accumulation phase, where investment earnings are taxed at up to 15%.
How your account-based pension is invested
Once in pension phase, your money remains invested in the options offered by your fund. This might include:
Growth assets: Australian and international shares, property
Defensive assets: Cash, term deposits, fixed interest
Diversified/balanced portfolios combining both
If you have a self managed super fund, you control the investment mix directly—whether that’s shares, property, ETFs, or other assets.
The key trade-off:
Growth assets can help your pension keep pace with inflation over a 25–30 year retirement, but they come with volatility. In 2022, many super funds experienced 10–15% drawdowns, which can be unsettling when you’re drawing income from the same pool.
Defensive assets (cash, term deposits) feel safer, but typically deliver lower returns. Over time, inflation—averaging around 2.5% annually—erodes purchasing power. An overly conservative portfolio can actually increase the risk of running out of money.
Key considerations for investment choices:
Your timeframe (retiring at 63 vs 70 makes a difference)
Health and life expectancy
Whether you plan to downsize from a family home in suburbs like Norwood, Burnside, or Glenelg
Other assets outside super (e.g., investment property, business sale proceeds)
Your tolerance for seeing your balance fluctuate
Investment earnings on the portion of super supporting an account-based pension are generally tax free—a significant advantage compared with holding investments outside super, where earnings may be subject to income tax at your marginal rate.
Minimum pension payments and withdrawal rules
The government sets minimum drawdown percentages based on your age at 1 July each financial year. These are applied to your account balance to determine the minimum amount you must withdraw.
Standard minimum drawdown rates:
Under 65: 4%
65–74: 5%
75–79: 6%
80–84: 7%
85–89: 9%
90–94: 11%
95+: 14%
These percentages are calculated on your pension account balance as at 30 June (or the start date, if you commenced mid-year).
Example: A 67-year-old Adelaide retiree with $600,000 in their pension account must withdraw at least 5%, or $30,000, in the 2025–26 financial year. They can choose to draw more, but not less.
There is no maximum withdrawal for a standard account-based pension. However, transition-to-retirement pensions (where you haven’t met a full condition of release) have a 10% maximum until you retire or turn 65.
A word of caution:
Taking large lump sums early—say, $150,000 for a major renovation or a holiday home on the Fleurieu Peninsula—can dramatically shorten the life of your pension. This is particularly risky if investment returns are modest or markets are volatile.
Tax benefits of account-based pensions
One of the main reasons retirees move super into pension phase is tax efficiency.
For people aged 60 and over:
Pension payments from a taxed super fund are generally tax free
Investment earnings on the amount supporting your pension are also tax free
This compares favourably with accumulation phase, where earnings are taxed at up to 15%, and with investments held outside super, where you may pay tax at your marginal rate.
For people under 60:
Tax treatment is more complex. Payments may include taxable and tax free components, and the taxable portion may be taxed at your marginal rate (with a 15% tax offset). If you’re in this situation, personalised retirement planning advice is essential.
Practical implications for Adelaide retirees:
Tax free pension income can stretch further, covering:
Council rates and utilities
Private health insurance premiums
Regular travel or lifestyle spending
Gifts or support for children and grandchildren
Interactions to be aware of:
Selling an Adelaide investment property or business around the same time as starting a pension can have capital gains tax implications
Timing contributions before moving to pension phase can maximise tax free benefits
Downsizer contributions (up to $300,000 per person from a home sale after age 55) may be useful for boosting super before starting a pension
How long will my pension last? (modelling longevity for Adelaide retirees)
An account-based pension has no fixed end date. How long it lasts depends on several factors:
Starting balance
Annual withdrawals
Investment returns (net of fees)
Future policy changes (e.g., changes to minimum drawdown rates)
Longevity is a real consideration:
Many South Australians now live well into their late 80s or 90s. A retirement starting at 60–65 could reasonably span 25–35 years. Planning for a shorter period is one of the most common mistakes in retirement advice Adelaide professionals see.
Scenario comparison:
A 65-year-old single retiree in Adelaide with $750,000 might consider:
Conservative withdrawals (5–6% per year): Funds may last into the late 80s or early 90s, depending on returns
Higher withdrawals (8–9% per year): Funds could run out by the mid-to-late 70s
The difference compounds over time, especially if early withdrawals coincide with poor market performance (this is known as “sequence risk”).
The importance of regular reviews:
Your retirement plan isn’t something you set once and forget. Review annually, and especially after:
Large market movements
Major health events
Significant spending decisions (e.g., helping adult children purchase in suburbs like Prospect or Unley)
Changes to Age Pension rules or tax legislation
Account-based pensions, Age Pension and Centrelink rules
Account-based pensions interact with the Age Pension in ways that can significantly affect your financial position.
How pensions are assessed:
For most pensions started after 1 January 2015, the account balance is counted as a financial asset under Centrelink’s assets test. Income is assessed using deeming rules—meaning Services Australia assumes your pension earns a certain rate of return, regardless of actual investment earnings.
Pensions started before 1 January 2015 may have some “grandfathered” concessions, but new pensions are fully subject to deeming.
Key thresholds (subject to change): Learn more about downsizer super contributions for retirement savings.
The balance of your account-based pension can reduce or eliminate your Age Pension entitlement. However, structuring withdrawals and assets sensibly may help optimise your combined income from pension, super, and government benefits.
Adelaide example:
A couple in their early 70s living in a paid-off home at West Lakes with around $550,000 in super pensions may partly qualify for the Age Pension. This can also provide access to concession cards, SA energy rebates, and reduced public transport costs.
Why advice matters here:
Modelling different strategies—when to start an account-based pension, whether to preserve some super in accumulation, how to sequence withdrawals—can materially affect your net income. This is where retirement planning advice tailored to your situation pays for itself.
Estate planning: what happens to your pension when you die?
When you die, the remaining money in your account-based pension is paid as a death benefit. Who receives it, and how it’s taxed, depends on your arrangements.
Reversionary vs non-reversionary pensions:
Reversionary pension: Automatically continues to a nominated beneficiary (usually your spouse) without interruption
Non-reversionary pension: Stops on death; the balance is paid as a lump sum or new pension to eligible dependants or to your estate
Tax on death benefits:
Payments to a spouse or dependent child are generally tax free
Payments to adult, non-dependent children may attract tax on the taxable component (up to 17% including Medicare levy)
Practical steps:
Keep beneficiary nominations updated, especially after divorce, remarriage, death of a spouse, or blended family situations
Coordinate super pension arrangements with your will, enduring power of attorney, advance care directive, and any binding death benefit nominations
If you have a self managed super fund, ensure your trust deed and beneficiary documentation are current
Estate planning is not just about minimising tax—it’s about ensuring your wealth goes where you intend, with minimal delay and dispute.
Retirement planning advice in Adelaide: beyond the pension product
While account-based pensions are central to most retirement income strategies, they’re only one piece of the puzzle.
Key planning areas for Adelaide retirees:
Day-to-day budgeting: Utilities, groceries, transport, council rates
Healthcare and aged care: Private health insurance, gap fees, potential residential aged care costs later in life
Property decisions: Stay, renovate, or downsize within Adelaide or to regional SA
Family support: Helping children or grandchildren with education or housing
Typical Adelaide retiree profiles:
Long-term public sector workers with defined benefit or accumulation super
Medical and legal professionals with significant super but often limited diversification outside the practice
Small business owners who are “asset rich and cash poor”—business value is high, but cash flow depends on continued work
Couples who own their home outright but worry about outliving their savings
Coordinating all the pieces:
Effective retirement planning brings together super, non-super investments, potential business sale proceeds, and Age Pension entitlements into a single strategy. This includes deciding:
When to retire and start pensions
How to sequence withdrawals (which account to draw from first)
How much risk to take with investments
When (and whether) to access the Age Pension
Seeking qualified financial advice specific to South Australian tax and property conditions is strongly recommended. Plans should be revisited every 12–24 months, or after major life changes.
Practical next steps for retirement planning in Adelaide
Retirement planning Adelaide professionals and business owners can take away from this article:
A practical checklist:
Confirm your super balances and preservation ages
Estimate your retirement spending (use ASFA’s Retirement Standard as a starting point)
Review any business exit plans and associated regulatory obligations
Update estate documents (will, power of attorney, super beneficiary nominations)
Book time with a licensed financial adviser for personalised retirement planning advice
If you’re a business owner in a regulated sector, engage a legal or regulatory specialist to review compliance well before any sale or succession
The aim:
A retirement that is sustainable, tax-effective, and resilient to financial crime risks—not just one that meets minimum superannuation rules. Getting the structure right early can make a meaningful difference over time.
Whether you’re five years or five months from retirement, taking time to understand these pieces now can save significant stress and money later.
How Money Path Can Help
Money Path offers expert retirement planning services tailored specifically for Adelaide residents and business owners. With deep knowledge of local financial conditions, regulatory requirements, and superannuation strategies, Money Path helps you create a personalised plan that aligns with your retirement goals.
Their experienced advisers provide comprehensive guidance on:
Establishing and managing account-based pensions to ensure a steady and tax-effective regular income stream
Optimising your super account and investment choices to balance growth and risk throughout retirement
Navigating Centrelink rules and maximising Age Pension entitlements
Coordinating business exit strategies with superannuation and estate planning
Protecting your retirement savings from scams and financial crime risks
By working with Money Path, you gain confidence in your retirement plan and access ongoing support to adapt your strategy as your circumstances change. Whether you are approaching retirement or already drawing a pension, Money Path can help you make informed decisions to secure a comfortable financial future in Adelaide.
Frequently asked questions about account-based pensions and retirement planning
When can I start an account-based pension if I live and work in Adelaide?
You can start once you meet a condition of release—typically reaching preservation age (55–60, depending on your birth year) and retiring, or turning 65 regardless of work status. Eligibility rules are the same across Australia.
How does my pension affect the Age Pension?
Your account-based pension balance is counted under the assets test, and income is assessed using deeming rules. The balance and deemed income can reduce your Age Pension entitlement, so structuring withdrawals and timing is important.
Can I still work part-time after starting a pension?
If you’ve met a full condition of release (e.g., retired after preservation age, or turned 65), yes. If you’re using a transition-to-retirement pension, you can work, but there’s a 10% maximum withdrawal cap until you fully retire or reach age 65.
What happens if I sell my Adelaide investment property?
The sale proceeds are not counted as super, but they will form part of your assessable assets for Age Pension purposes. Capital gains tax may apply. The proceeds could be reinvested, used to fund retirement, or contributed to super (subject to caps).
How do business sale proceeds interact with super and pensions?
Proceeds from selling a business can be contributed to super (within contribution caps), potentially using small business CGT concessions. Timing contributions before starting a pension can maximise tax benefits. Professional advice is strongly recommended.
How can I protect my super and pension from scams in retirement?
Be wary of unsolicited offers, never share myGov details, check adviser and product licensing with ASIC, use two-factor authentication, and seek independent advice before making major decisions. If something feels off, talk to a trusted adviser or family member.
Do I need professional advice to start an account-based pension?
It’s not legally required, but professional advice helps avoid common mistakes—missed tax opportunities, inappropriate investment risk, uncoordinated Age Pension strategies, and estate planning oversights. Advice typically pays for itself over time.
