To me, a preservation age sounds like you’re some type of pickled vegetable or cured meat! But alas, you can remain human for now. Because when we are talking about your preservation age in relation to superannuation, it is simply the age that you become eligible to access your super for the very first time.
Superannuation Preservation Age
Your superannuation preservation age in Australia is determined by the year and month you were born.
The table below shows your preservation age.
|Date of Birth
|Before 1 July 1960
|1 July 1960 – 30 June 1961
|1 July 1961 – 30 June 1962
|1 July 1962 – 30 June 1963
|1 July 1963 – 30 June 1964
|After 30 June 1964
How Much Super Can I Withdraw At Preservation Age?
Once you have reached your superannuation preservation age, the amount of super you can withdraw is based on your employment status.
Provided you have reached your preservation age, you will have at least some access to your super.
Let’s take a look at some employment situations you might find yourself in and how that affects the amount of super you can withdraw.
How Much Super Can I Access If I Continue To Work?
If you have reached your superannuation preservation age and will continue to full-time or part-time in your current role, then you are only eligible to access your superannuation in the form of a transition to retirement pension.
A transition to retirement (TTR) pension allows you to receive an income of between 4% and 10% of your account balance each financial year.
If you plan on continuing to work, you may consider leaving a small balance in your super accumulation account, so that it remains open to accept future super contributions and so that any insurances within super that you wish to retain can remain in place. The remainder can then be used to start a TTR pension.
You also want to be mindful of the risks of rolling over your super to a new account, as well any tax implications of accessing your super while under age 60.
How Much Super Can I Access If I Retire?
If you have reached your preservation age and are retired, with no intention of returning to full-time or part-time work ever again (or have met this other definition of retirement), then you have full unrestricted access to your super – meaning you can withdraw all of your super if you want! However, leaving money within super can provide concessional tax treatment on superannuation investment earnings (or even no tax!).
If retired, the way in which you can access your super is as a lump sum withdrawal or to use your super to commence a retirement income stream.
Again, be mindful of the risks of rolling over your super and any tax implications, especially while under age 60.
What Happens To My Super When I Reach Preservation Age?
There is no change to your superannuation once you reach preservation age. It will remain invested the same way until you decide to do something with it. You are not required to do anything with your super just because you have reached your preservation age.
Is My Super Tax Free At Preservation Age?
Neither withdrawals from super, nor investment earnings within super are guaranteed to be received tax free just because you have reached your super preservation age.
Your preservation age is not the determining factor that can provide tax free status on your super.
Generally, withdrawals from super are tax free after reaching age 60 (regardless of your preservation age). However, there are instances where you can access your super tax free while under age 60.
Read More Here: When Can I Access My Super Tax Free?
In relation to investment earnings within super – these are only received tax free once you use your super to start an account based pension (not a TTR pension).
Can I Access My Super At 60 and Still Work?
You are able to access your super at 60 and still work. The amount of super you can access will be based on whether you remain in the same occupation or have had a recent change in jobs.
Regardless of when you were born, attaining age 60 means you have attained your superannuation preservation age. Therefore, at the very least, you can access your super in the form of a transition to retirement (TTR) pension.
Watch this video to get a better understanding of a how a TTR Pension works:
Change in Jobs
If you have had an employment arrangement come to an end on or after attaining age 60, then you have met the full definition of retirement, meaning you can access your super as a lump sum or account based pension.
Your superannuation preservation opens up a number of retirement planning strategies that can help you to build your super faster and reduce tax, without the risk of locking away your funds for an extended period of time.
Our financial planning firm, Toro Wealth, specialises solely in helping 50 to 70 year-olds optimise their financial position in the lead up to retirement. If you’re interested in learning more about our service and cost, click here.
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