Where Will Your Retirement Income Come From? Key Sources Explained

05 June 2025

2 read min

One of the most common questions retirees ask is, “Where will my retirement money come from?” Typically, your retirement income will come from a combination of sources:

Government age pension

The Age Pension provides a basic income but is designed to offer only a modest standard of living. Many retirees find that while the Age Pension helps, it’s often not enough to maintain the lifestyle they desire, so other income sources are necessary.

Superannuation

Your superannuation, whether accessed as a lump sum or a regular income stream, plays a vital role in funding your retirement. Superannuation is designed to grow over time, helping you accumulate savings for when you retire. You can choose how to withdraw your super—either in regular payments or a one-time lump sum—and the balance continues to be invested while you draw from it if you choose regular payments.

Personal savings and investments

Personal savings, investments, or even additional pensions like defined benefit plans or annuities provide supplementary income. These sources can give you more flexibility and help ensure a comfortable retirement.

Earning money during retirement

Many retirees choose to continue working part-time, consult, or start a business. Earning money during retirement can supplement your income and help you stay active and engaged. However, keep in mind that any earnings may affect your eligibility for government benefits. You may want to utilise a Transition to Retirement (TTR) account to save on tax.

Downsizing the family home

If you’re 55 or older, downsizing your home can be a fantastic way to boost your legalsuper balance with up to $300,000 per person from the sale proceeds. This one-time contribution allows you to grow your retirement savings beyond standard caps, and both members of a couple can take advantage of it if eligible. It’s a flexible option that can enhance your retirement lifestyle. For full details and eligibility, visit the ATO’s downsizer contribution pages.