ALL super income from the $1.6M limit is tax free (if you're over 60), beyond that its taxed at 15%.
Income outside super during retirement is taxed at normal tax scales - ie, you can earn an additional circa $18k tax free.
As you get closer to retirement, your exposure to equities should reduce to all but the bluest of blue chips - and even then you're being risky.
[the following is NOT an ad for any particular investment product!]
One investment category, other than the obvious annuities (which can guarantee an income over a defined period) and bank deposits, is company and government bonds. The latter are, of course, guaranteed and therefore have a low coupon (1.5 to 2.5-odd % right now). The former can range from 2 to 12% depending, again, on the risk.
A reasonable bond like Qantas or Sydney Airports pays a coupon of 6 or 3.5% respectively (the latter is inflation linked, so the face value of the bond increases with time). The good thing is, no matter how the bond price fluctuates, if you hold to maturity you get your capital back. If you choose a senior debt bond, you have a greater chance of getting your money back if the company fails. An example of this might be FMG's US denominated bond. Its currently paying 8.66%, is rated BBB-, and has the added advantage of being in US$, if you want to play the FOREX margin. In theory (!), if FMG fails, its assets far exceed its debt, so senior debt will likely be paid in full. (in theory: supposedly, if FMG fails the iron ore industry is down the gurgler and its mines might be worth zero. However, its rail and port infrastructure would be snapped up by the likes of BHP.)
As income is tax free in pension phase, putting together a bond and deposit portfolio to deliver over 5% is not that difficult (I say pension phase because bond coupon payments don't come with franking credits.)
