It’s very important to understand when you can access your superannuation – even if you don’t need the money right now.
Being able to access your super opens the door for a number of retirement planning strategies and can give you a more flexible work schedule as you transition into retirement.
What Age Can I Access My Super?
In Australia, the age that you are eligible to access your super is determined by your year and month of birth and is referred to as your superannuation preservation age.
Your preservation age, as shown in the table below, is the first time you are typically able to access your super.
|Date of Birth||Preservation Age|
|Before 1 July 1960||55|
|1 July 1960 – 30 June 1961||56|
|1 July 1961 – 30 June 1962||57|
|1 July 1962 – 30 June 1963||58|
|1 July 1963 – 30 June 1964||59|
|After 30 June 1964||60|
How Much Super Can I Access?
Just because you have reached your superannuation preservation age, it doesn’t mean you automatically have full access to your super. There are limitations that apply and other conditions that need to be met.
The four main ways in which you can access your super will be based on your age and employment status. So, let’s take a look at how your age and work can affect your eligibility to access your super.
1. Over Preservation Age and Still Working
If you are over your superannuation preservation age, but still working part-time or full-time (or intend on doing so), you can usually only access your super via a transition to retirement pension.
A transition to retirement pension is an income stream started with your super accumulation balance. You must receive an income of between 4% and 10% of your account balance each financial year.
2. Over Preservation Age and Retired
If you have reached your preservation age and are retired, with no intention of returning to full-time or part-time work ever again, then you can have full, unrestricted access to your super. You can access your super in the form of a lump sum withdrawal or an income stream, or a combination or the two. Part-time is defined as 10 hours+ per week.
Interestingly, retiring with ‘no intention to return to work ever again’ does not completely restrict you from returning to work if your intentions change sometime in the future, provided your intentions were genuine at the time you did retire.
3. Over Age 60 – Ceased Employment Arrangement
If you are over age 60 and have had an employment arrangement come to, then you are said to have met a full superannuation condition of release. This allows you to have full access to your super.
Ceasing an employment arrangement simply means stopping work in your current role (even if self-employed) with no continued arrangement to return to that role or business. Under this condition of release, you are permitted to work in any other capacity immediately after ceasing the arrangement (i.e. you do not need to be retired), provided the arrangement in which you were working under genuinely ended.
4. Over Age 65
If you are over age 65, you have full access to your super with no restriction, even if you are still working. Being over age 65 means you can use all or some of your super balance to start an income stream or make a lump sum withdrawal, or both.
Learn more: Superannuation Advice
When Can I Access My Super Tax Free?
Generally, if you are over age 60, you can access your super tax free. All lump sum withdrawals and pension payments will be received tax free.
If you are under age 60, the tax on withdrawals will be based on the tax components that make up your balance. Specifically, your current super balance consists of tax-free and/or taxable components and all withdrawals, either in the form of lump sums or income stream (pension) payments, must be made proportionately from each tax component.
The portion of the withdrawal that is derived from the tax-free component will be received tax free in all cases and the taxable component will be assessed for tax.
A small portion of people may have taxable (untaxed) components within their balance. If this is the case, more tax may be payable under age 60 and this component will be assessed for tax even if you are over age 60.
This video explains exactly when you can access your super tax-free:
Read more here: When Can I Access My Super Tax Free?
How Can I Access My Super Early?
There are no loopholes around accessing super prior to your preservation age; however, there are a number of ways in which you may be eligible to access your super early. These include:
- Compassionate Grounds
- Severe Financial Hardship
- Terminal Medical Illness
- Temporary Incapacity
- Permanent Incapacity
- Super Balance Below $200
Related article: Early Access to Super
As soon as you reach the age where you can access your super, a number of retirement planning strategies become available to you. If you have reached your preservation age or are close to it, you really need to be getting on top of your super and seeing what you can do to build your balance, minimise your tax and plan for your retirement.
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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