Many retirees take their super benefits at retirement by way of a regular income stream called a pension. The main reason for doing so is to meet a retiree's ongoing need for income.

An advantage of an income stream funded from superannuation is that earnings generated within the fund are completely tax free and if the member is aged 60 and over, all lump sum and pension payments withdrawn are also tax-free. There is a cap however, on the amount of funds able to be held within a member’s pension account. This cap is called the ‘Transfer Balance Cap’ and restricts the amount of funds held within a member’s pension account to $2m for 2025/26. If, instead of retaining super funds within a pension account at retirement, you withdrew the money from super and invested it in other investments outside of super, in most cases you would likely pay tax on any earnings at your marginal tax rate.