Account Based Income Streams

An account-based income stream can be commenced as a pension by self-managed super funds, retail super funds, and certain employer and industry super funds.

They generally provide you with full access to your capital at any time (fully commutable), making it a flexible and accessible option.

Other types of income streams may not necessarily allow access to your capital (for example a lifetime income stream).

Investment earnings, the amount of the income payments you choose to withdraw each year and any lump sum withdrawals you make will ultimately determine how long your account balance will last. The more you choose to withdraw in the form of income payments or lump sum withdrawals, the sooner your balance will be depleted.  Further, the rate of return generated from the investments will also affect how long the account balance will last.  The lower the rate of return generated, the lower will be the account balance. Accordingly, a member’s account-based pension might be depleted prior to the life expectancy of the member which is a significant risk.

It is important to be aware that the investment returns and how long the income stream lasts are not guaranteed. Members have the ability to choose the type of investments held within their retirement account and take on the risk and return.