The difficulty is that prior to 65 many people only have limited savings and surplus income to contribute, as they have other family priorities.

Now there is another option for these people to contribute more to super later.

It is smart to maximise super contributions and balances because super which is converted to a retirement income stream provides entirely tax-free earnings and cashflows.

There is no tax on the earnings in the fund and the retirement pension payments are excluded from tax returns.

The opportunity for people over 65 to contribute to super is known as the "downsizer rule". When over-65s sell a home or former home they are able to contribute up to $300,000 from the sale proceeds to super. If a couple occupy the home each can contribute up to $300,000.

The maximum contribution is limited to the sale price of the property. If a house is the home of a couple but is owned in one name only, both can contribute. The contribution must be made within 90 days of receiving the proceeds.

The home must have been owned for at least ten years but it isn't necessary to have lived in it for the whole period. The home sold can be a farm or partly commercial property but not a caravan or houseboat. The contribution is not tax-deductible and no entry tax is applied.

Retirees do not have to buy a smaller or less expensive home, or any new home at all. They can move into a granny flat or aged care. The entitlement can only be claimed for the sale of one home. There is no age limit for contributors.

For example one 94-year-old has been in aged care for several years with her husband still living in their family home. He has suddenly passed away. She can sell the home and make a downsizer contribution. This will help reduce her tax. When she was working age super wasn't readily available.

Account-based pensions also provide a very convenient way for retirees to earn higher returns long term by investing in less predictable assets than bank deposits, but still generate fixed, reliable incomes.

Retirees can choose to invest their account-based pensions mainly in secure, interest-bearing areas. If they wish to earn higher returns they can also select property or shares, in Australia or overseas, or any combination of assets they feel comfortable with.