Australians are living longer than ever before, with retirement often lasting two to three decades. For those approaching retirement, making sure your income lasts the rest of your life will likely be top of mind.

Although you won’t get paid a salary when you retire, you can still receive income from a variety of sources.

Understanding your options for regular income streams in retirement can help you to plan so you have enough to cover more than just the basics and enjoy a comfortable lifestyle.

It can also help to alleviate the stress that may come with no longer receiving a regular pay cheque.

Here we look at different retirement income streams.

Income from your super

An account-based pension is a retirement income stream made up of regular payments from your super savings. You get to choose how often you receive your regular income payments and how much super to withdraw each year, subject to minimum withdrawal requirements. You can also make lump sum withdrawals when you choose.

If you’re 60 or over, this regular income stream will be tax-free. Earnings on the balance in a retirement income stream (up to transfer balance cap) are also tax-free.

Your account-based pension income payments will stop once your super savings have run out, so it’s important to plan ahead to make your super savings last.

The Age Pension

The Age Pension is a means-tested income stream paid to older Australians by the government. To be eligible for the Age Pension, you must meet certain criteria:

You must meet the government Age Pension age, which will differ depending on when you were born:

Residence rules – you must be an Australian resident and have lived in Australia for at least 10 years.

The income test – income from all sources will be assessed to determine how much you’ll receive.

The asset test – all asset types are assessed, including any property or possessions you own or have an interest in, including those held outside of Australia. The amount of pension you receive will depend on the value of your assets.

Relationship - The amount you receive will also depend on if you’re single or partnered.

Income from investments outside of super

Super and government benefits are not the only source of income in retirement. Many Australians hold personal investments outside of super, such as property, managed funds and shares. These assets are often an important component of retirement income, particularly given the limits to the amounts Australians can contribute to their super each year.

Depending on your personal circumstances, earnings from investments outside of super may not be as tax-effective as earnings from your retirement income stream, which are generally tax-free.