It is important to understand where this income will come from, how long it will last, and whether your retirement investments are on track, or whether some adjustments need to be made to get you there.

Work out how long your super or account-based pension will last

There are many variables that come into play when calculating how long your super or account-based pension will last in retirement, and it can be challenging to figure it out alone.

If you’ve transferred your super to a pension account already, then you can use the MoneySmart calculator, opens in new window to help estimate how long your pension will last. And if you haven’t, we recommend you speak to an adviser who can discuss with you different considerations that will impact how long your account-based pension will last.

Here are some of the fundamental things you need to know about a couple of other retirement income options.

Account based pensions

Account-based pensions are a popular retirement income product. They fluctuate in value and are linked to the market so your investment, and therefore your long-term income, isn’t guaranteed.

How long an account-based pension lasts will depend on:

  • the amount of initial capital invested
  • the return from the underlying investments
  • the amount of fees charged
  • how much you withdraw as income each year.

The tax benefits of account-based pension are:

  • you don’t pay tax on pension payments from age 60
  • if you’re aged between preservation age and 59, the taxable portion of your pension payments will be taxed at your marginal tax rate less a 15% offset
  • you don’t pay tax on investment earnings.

In some cases, the underlying investments for most pension accounts are chosen to minimise fluctuations but still provide a bit of growth.

Defensive assets

These include cash and fixed income. In general, they're lower risk and provide lower returns over the long term.

Growth assets

These include equities and property. They're usually open to market fluctuation but tend to provide higher returns over the long term.

Generally, defensive assets provide you with a relatively steady return and, therefore, income. However, some growth assets are usually needed to keep your funds growing during your retirement, so they last longer. With an account-based pension, you can mix defensive and growth assets to a ratio that you're comfortable with.


Some annuities could provide you with regular and guaranteed income for either a fixed period or for life. They are more secure than account-based pensions as your income is guaranteed regardless of what the share market and interest rates do.

The downside is that you're locked in to the agreed income for the whole term or the rest of your life. If your circumstances change, you generally can't withdraw a lump sum. A lifetime annuity also has no residual capital value, which means you can't leave it to someone in your will.

The best of both systems

Continuing to build your investments, including your super funds, is still crucial in retirement. They need to keep growing to ensure your retirement income lasts as long as possible.

This means it becomes increasingly important to protect your super growth funds from market falls while still allowing them to grow if the market goes up.

Protecting your savings

MLC MasterKey Investment Protection enables you to grow your savings with confidence. It means your savings are protected if the market goes down and your investment still grows when the market goes up.

MLC MasterKey Investment Protection is available on MLC MasterKey Super & Pension Fundamentals and is offered on a range of diversified multi-manager investments. You’ll be eligible for protection if you’re at least 50 years of age and have between $30,000 and $1.5 million to protect (should you have more, please contact us).

You can choose from two types of protection, protected capital and protected income.

Protected capital

With protected capital, you’ll know what your minimum investment balance will be at the end of a 10 or 20-year term. Your savings are protected from negative investment performance, and growth in your investment can increase the minimum investment balance you receive at the end of your term.

Protected income

With protected income, you’ll know what your minimum income amount will be each year. You can protect your income for 10 years, 20 years or for life. Your income amount will not be affected by negative investment performance and can increase as a result of investment growth. Protected income for life means you can protect against the risk of outliving your savings because you still receive regular payments even if your savings run out.

MLC MasterKey Investment Protection is only available to you through a licensed financial adviser or through their authorised representative.

More information can be found in our Investment Protection Guide, opens in new window.

Other things to consider

Age pension eligibility

When it comes to the Age Pension, there are several rules to determine your eligibility. You can learn more by visiting Services Australia, opens in new window, but some of the basic rules are:

  • You must have reached your Age Pension age, which is currently 66 (after 1 July 2019, age pension age will go up 6 months every 2 years until 1 July 2023).
  • You must be a resident of Australia.
  • You must pass income and asset tests.

If you don’t meet the income and assets tests to be eligible for the Age Pension, you may be able to access the Commonwealth Seniors Health Card (if you pass an income test). This card provides affordable medicine, bulk billed doctor visits and depending on what state you live in, there may be some other concessions that you’re entitled to. You can find out more from Services Australia, opens in new window.

Speaking to a financial planner

With so many options, it’s a good idea to seek help to ensure you’re investing in a way that suits you. Particularly as there are some more complex considerations, such as tax implications. You can talk to your financial consultant or set up an appointment with a financial adviser by calling 1300 558 863 Monday to Friday, 9:00am to 6:00pm (AEST/ADST).

Have confidence in your future with help from a financial adviser.

Important information

This information is provided by National Australia Bank Limited ABN 12 004 044 937 AFSL No. 230686 (NAB), a member of the National Australia Bank Group of companies. Any advice is general in nature and has been prepared without taking into account your personal objectives, financial situation or needs and because of that you should, before acting on the advice, consider the appropriateness of the advice having regard to those matters. See the NAB Financial Services Guide for details about relationships between NAB and product issuers, and remuneration or benefits that may be received in relation to NAB’s authorised services.

Target Market Determinations for these products are available at