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If one simple move could boost your total retirement income by as much as $99,000, would you do it?
When you retire, you super should move too. That’s because the Australian super system has two phases: the accumulation phase (when you’re working and adding money) and the retirement phase (when you stop working and start withdrawing money).
In both phases, your money is invested and earning returns. But in the accumulation phase, your investment earnings are generally taxed at 15%, while they are tax-free in the retirement phase.
If you don’t make the switch when you’re eligible, it could cost you thousands in tax, leaving you with less money to support you in retirement.
How big is this problem?
Research commissioned by HESTA1 shows that transitioning to a retirement phase product like a HESTA Retirement Income Stream could boost a member’s total retirement income by up to 12%, or as much as $99,000 (based on a 65-year-old member with a balance of around $400,000 who is partnered and a homeowner) compared to those who delay transitioning by four years.
In fact, our research highlighted eligible Australians missed out on $13.5 billion in tax-free investment returns between 2017 and 2025, simply because they didn’t move their super into retirement phase products when they became eligible.
This problem is even more pronounced for HESTA members. According to our research, only 30% of eligible members have made the switch, leaving 83,000 members in the accumulation phase. They’ve missed out on $69 million in tax-free investment returns in just one year (FY2025).
How does an income stream work?
An income stream turns your super savings into a regular income, which means you can stop working but keep getting an income.
Think of it like the income you received from your job, but you can decide how much and how often you get paid. Plus, you have the flexibility to withdraw additional amounts for holidays or other expenses whenever you need to.
For most people, the best bit about income streams is the generous tax benefits. If you’re 60 or older, your income payments and investment earnings are generally tax-free. That means while you get regular income, your super stays invested, which could mean even more money for you in retirement.
The government sets minimum and maximum drawdown limits for income streams. If you’re worried that the minimum drawdown amount is too much, you can re-invest any extra money into an accumulation account until you’re 67.
If you’re planning on applying for the Age Pension, it doesn’t matter whether your money is in super, an income stream or your bank account as it will generally be assessed by Centrelink in the same way.
Watch this video to learn more about income streams
Linda Panaszek, HESTA Superannuation Specialist:
So you want to stop work and start enjoying retirement.
You've been building your super for years, but you're not sure what happens to it once you retire.
Many Australians think their super balance just gets paid into their bank account. This is possible. But in reality, you may still want your money to earn investment returns.
The HESTA Retirement Income Stream gives you access to a regular income from your super, while your money keeps working hard for you.
You can access tax-free income payments from age 60, or tax offsets before age 60, and receive tax-free investment earnings once you meet a condition of release.
There are decisions to make along the way about how much income to take out, how often you'd like to receive it, and where your money will be invested.
You can invest in the HESTA Income Stream ready-made strategy designed especially for retirees to reduce investment risk over time, or create your own strategy.
You may even be eligible for the HESTA Retirement Reward bonus.
Retirement doesn't have to be daunting as you work out how you keep money coming in to pay the bills.
With a HESTA Retirement Income Stream, you can receive a regular income paid directly to your bank account, which many of our members combine with their Age Pension to cover their expenses.
You can use your member-only Future Planner to see how your retirement income could work and how to make it last. Just log into your online account to start exploring.
Of course, if you find you might be a little short, you could see how continuing work for a while but reducing your hours might help make your savings stretch that bit further.
Every financial situation is different and helping our members work out how to make the most of their retirement savings is what we are here for.
The peace of mind that comes with understanding how best you use your retirement savings and knowing you still have a regular income can mean all you need to worry about is how you'll spend your newfound time.
If you've already decided on an income stream, it's easy to apply. Just log into your online account.
If you've reached your preservation age, an Apply Now button will appear on your dashboard. Click the button, then follow the tabs along the top.
If you get stuck along the way, a HESTA team member will call you to help complete the process.
If online is not your thing, we have a paper application form. See the Income Stream Product Disclosure Statement (PDF).
If you need help, just book a time with our team here and they can help you fill it in over the phone.
You can find other helpful information on our website or read our Income Stream Product Disclosure Statement (PDF).
Am I eligible to open a HESTA Retirement Income Stream?
You may be eligible to open a HESTA Retirement Income Stream if you’ve:
- reached your preservation age and fully retired, or
- ceased an employment arrangement on or after age 60, or
- reached age 65 even if you are still working, or
- become permanently incapacitated, or be terminally ill, or
- been using a Transition to Retirement (TTR) Income Stream while continuing to work, and are now ready to stop working, or have met one of the other conditions above.
Learn more about HESTA Retirement income Stream eligibility and how to apply.
How is HESTA making retirement easier?
We want to help modernise the super system so it’s simple and flexible for retirees.
We’re asking the government to remove certain regulatory barriers so that:
- super funds can help members move from accumulation accounts into a tax-free retirement account as soon as they become eligible
- members can add money to their retirement accounts if they keep working after reaching retirement age, and
- people who receive the Age Pension can work more without losing their entitlements.
Learn more about how HESTA wants to help guide members to a tax-free retirement.
1 Research conducted for HESTA by Laneway Analytics, December 2025. The Laneway Analytics modelling is based on assumptions, including investment returns, the drawdown rate from income streams, actual member behaviour patterns, as well as combined superannuation and Aged Pension income. Further assumptions can be found in the white paper available here.
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