What is the retirement bonus and how do you get it?
Written and accurate as at: Dec 11, 2025 Current Stats & Facts
If you’re nearing retirement, you might have heard the term 'retirement bonus' thrown around. While it sounds appealing on the face of it, it's helpful to know what exactly it is and how it works.
What is the retirement bonus?
Put simply, it's a tax saving that your fund passes onto you.
During your working years, your super sits in an accumulation account, where it’s invested in the hope that a tidy sum will be waiting for you once you retire. During this time, your fund sets aside money to cover tax on the profits your super makes.
But if you retire and convert your super into an account-based pension, this money is no longer needed. That’s because the earnings on investments within a pension account are tax-free. Instead of holding onto this extra money, your fund gives it to you in the form of a retirement bonus.
How do you get it?
Not all super funds offer retirement bonuses to their members, so the first step is to check with your fund to see if it’s available. Then, you generally need to meet a few conditions to be eligible.
For starters, you must have reached your preservation age (which is 60 for anyone born after 30 June 1964) and officially retired to commence an account-based pension in the first place. Many funds also require you to have been a member for at least 12 continuous months and have held your super in eligible investment options during that time.
If you tick all the necessary boxes, the process from here is fairly straightforward. Your fund will work out how much you’re eligible for and automatically add that amount to the opening balance of your new pension account. The amount you receive will be based on your super balance and a rate set by your fund.
What should you do with the money?
You could leave your retirement bonus untouched and let the extra money compound over time, hopefully enhancing the pool of money you have to support your lifestyle during your golden years. Or you could choose to withdraw the bonus and put it towards a big ticket item you’ve had your eyes on, like new furniture or a long overdue holiday.
Ultimately, the best approach will depend on your personal circumstances. If you’re looking for more details about the retirement bonus and how it can help support your overall retirement strategy, it might be worth speaking to a financial adviser or your super fund.
