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Account-based pension

An account-based pension is an account where you invest your superannuation and which pays a regular income.

With an account-based pension you can generally choose from a range of investments and select the income you draw subject to minimum pension requirements. When the money in the account is exhausted, the income will cease.

An account-based pension may also be referred to as an ‘allocated pension’. It's important to understand that an account-based pension is not a lifetime annuity, although they can be designed to produce fixed, regular payments. The difference between a lifetime annuity and an account-based pension is that annuities offer the option of continuing to pay these regular payment amounts for life, regardless of how long you live.

Account-based pensions could be linked to the share market which means that your investment would be linked to the performance of the underlying investments. This could impact the level of your savings, how long they’ll last for, and the income it produces to fund your retirement lifestyle.


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