Are you over age 60 and want to know if you can use some of your superannuation?
This article discusses how you can use some of your superannuation over age 60, including the forms in which you can access it and any tax that may be payable.
There are four main ways you are able to access your superannuation over age 60.
1. Accessing Super: Over age 65
Being over age 65 signifies a full superannuation condition of release, providing you with full, unrestricted access to your superannuation savings.
2. Accessing Super: Between 60-64 (retired, with no intention of returning to work)
If you are over age 60, but under age 65 and have retired from the workforce permanently, with no intention of returning to full-time or part-time work, then you will also have full unrestricted access to your superannuation savings.
3. Accessing Super: Between 60-64 (employment arrangement comes to an end)
If you are over age 60 and, while over aged 60, an arrangement under which you were employed comes to an end, you will have access to all accumulated savings up until that point, regardless of whether you take up employment in another capacity. However, all future contributions made into your account from that point will not be fully available.
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4. Accessing Super: Between 60-64 (still working – transition to retirement (TTR) pension)
If none of the conditions above have been met, you should have the ability to access and use some of your superannuation savings via a transition to retirement (TTR) pension. A TTR Pension is available to anyone over age 60 and involves using some or all of your superannuation accumulation savings to commence an income stream pension. However, you can only receive an income equal to between 4% and 10% of your account balance each year, as calculated on 1 July of each year, or pro-rata from the date the pension commenced.
Therefore, a TTR pension allows you to use some of your superannuation in a limited capacity and still work.
A TTR pension is a non-commutable income stream, meaning lump sum withdrawals are not permitted (only pension payments). A TTR Pension converts to an ordinary account based pension upon reaching age 65, allowing access to the full balance of the pension (i.e. the 10% p.a. restriction is removed).
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Using Superannuation Over 60: Ways to Access
There are two ways that you can use or gain access to your super when over age 60. Your super can be accessed as either a lump sum withdrawal or an income stream (or combination of both).
A lump sum is simply a withdrawal from your superannuation accumulation account. There is currently no limit on how much you are able to withdraw as a lump sum. However, if you are still working and have not met the conditions of 1, 2 or 3 above, then withdrawing your superannuation as a lump sum is not an option to you.
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A pension income stream is an income stream that you can commence with some or all of your superannuation account balance (having regard to the Transfer Balance Cap under the new superannuation rules from 1 July 2017). A TTR Pension income stream is your only way of accessing your superannuation if you are still working and have been in your current position every day since turning age 60.
Using Superannuation Over 60: Tax
Your superannuation account balance consists of three tax components. These are Tax-Free Component; Taxable (Taxed) Component; and Taxable (Untaxed Component).
All withdrawals from your superannuation account or superannuation pension account must be proportionate from each component. Generally, the tax components of your superannuation account will not be detailed on your super statement. You will often need to phone your superannuation provider, or logon to your account to find the tax components that make up your superannuation balance.
All lump sum withdrawals and pension payments received from the Tax-Free and Taxable (Taxed) Components are received completely tax free if you are over age 60.
The Taxable (Taxed) Component is taxed as follows for people over age 60:
| Withdrawal Type | Amount | Tax Rate |
|---|---|---|
| Lump Sum | First $1.415M (lifetime – indexed) | 15% |
| Lump Sum | Amounts over $1.415M (lifetime – indexed) | 45% |
| Pension Payment | Total Amount | Marginal Tax Rate less 10% rebate |
Many superannuation accounts will not even include a Taxable (Untaxed) Component, which means, for many people, all withdrawals from superannuation, whether accessed as a lump sum or income stream, will be received completely tax free.
Can I Access My Super At 60 and Still Work?
You are able to access your superannuation at age 60 and still work. You will have full unrestricted access to your super if you cease an employment arrangement after turning age 60, or you can have limited access to your superannuation, via a transition to retirement (TTR) pension, if you have not ceased an employment arrangement. Both of these scenarios are discussed above. See points 3 and 4.
When Can I Access My Super Early?
You will need to meet a superannuation condition of release to access your superannuation. The very large majority of people meet a condition of release under the retirement provisions or attaining age 65. However, there are a number of other conditions of release that may allow you to access some or all of your superannuation ‘early‘.
These include, but are not limited to:
- Permanent incapacity
- Temporary incapacity
- Severe financial hardship
- Departing temporary residents
- Compassionate grounds
- Balance under $200
- Death
Hopefully this article has helped you to answer the question ‘Can I Use Some of My Superannuation Over 60’. Feel free to browse some other articles and popular posts throughout this website that may be able to answer more of your superannuation questions.
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How to Manage Your Super Without Paying a Financial Adviser
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