The difference between superannuation and retirement is that one is a vehicle for retirement savings and one is a term generally used to describe the act of no longer working.

Superannuation can be broken into two main parts and retirement can have numerous definitions, depending on the context.

This article will go through each aspect of superannuation and retirement.

By the end, you should have a good understanding of the difference between superannuation and retirement.

Difference Between Superannuation and Retirement



Superannuation is a trust structure that allows you to save towards retirement.

The benefit of investing in superannuation is the tax savings available on certain types of contributions and the tax concessions on earnings from investments within a superannuation account.

The trade-off for the tax savings and concessions associated with super is that anything contributed to super cannot be accessed until you reach a particular age.


Retirement in Australia can have a number of definitions.

Generally, we consider retirement to mean stopping work and never returning.

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Retirement, in the context of superannuation, has a number of legislative definitions.

Specifically, for superannuation purposes, retirement can be defined as either ceasing work after your superannuation preservation age, with no intention of returning to full time or part time work; or having an employment arrangement come to an end after reaching age 60.

Difference Between Superannuation Fund and Pension Fund

When it comes to superannuation and retirement, terminology can get confusing. There are many superannuation terms that have different meanings and many meanings that have different terms.

For instance, in my opinion, the word superannuation should encompass an accumulation account and a pension account.

Accumulation is where your savings are held while you are working or making contributions and a pension account is where you convert your accumulation account into a pension income stream to support your lifestyle throughout retirement.

However, many people (and even superannuation providers) refer to accumulation accounts as super accounts and pension accounts as pension accounts.

So, what’s the difference between a superannuation fund and pension fund?

These days, there is generally no difference. Consider them both as retirement funds if you like. In its simplest form, the difference between superannuation and pension in Australia is this:

A super fund is something you have while you are still working and a pension fund is what you have when you stop working and begin drawing down on your retirement savings.

Difference Between Superannuation Fund and Pension Fund – Tax & Practicalities


Superannuation Fund

A superannuation accumulation fund is an account that holds your retirement savings. You can contribute to this account and make lump sum withdrawals if you have met a full superannuation condition of release. All earnings received from investments within a superannuation accumulation fund are taxed at up to 15%.

Pension Fund

A pension fund is established by transferring all or some of your accumulation fund to it once you reach your preservation age.

A pension fund can be a non-commutable (transition to retirement) pension or an ordinary pension.

You cannot contribute to a pension fund.

You must receive the minimum required annual income from a pension fund.

All earnings within a non-commutable account based pension are taxed at the same rate as an accumulation account – up to 15%.

All earnings received from investments within an account based pension are received tax free.

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Difference Between Superannuation and Voluntary Retirement

The superannuation retirement definition, as mentioned previously is based on stopping work after reaching your preservation age, with no intention of returning, or ceasing an employment arrangement after age 60.

The significance of the superannuation retirement definition is that it provides you with unrestricted access to your accumulated superannuation savings, which can be accessed in the form of a lump sum, income stream or a combination of the two.

The difference between superannuation and voluntary retirement is that voluntary retirement is a term used as part of an employment arrangement.

Early voluntary retirement can be seen as an option for companies to incentivise older employers to retire early in exchange for payment. You can read more about early voluntary retirement and early retirement schemes here:

Despite receiving a voluntary retirement payments under an early retirement scheme; it is possible to also have superannuation savings. Superannuation savings may or may not be accessible after entering into a voluntary retirement agreement, depending on your age and employment status.

Chris Strano

Hi, I hope you enjoyed reading this article. If you want my team and I to help with your retirement planning, click here. If you prefer a DIY approach, then check out the SuperGuy HUB. Thanks for stopping by - Chris.

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