SECOND to the family home, for most Australians, their superannuation is their next biggest asset. As workforce participation slows down or winds up completely, people want to access their superannuation to supplement their income. As you get to that stage of your life it is helpful to understand the rules around accessing your super. To access your super benefit, you must satisfy a condition of release. Here we will discuss the most common ways superannuation can be accessed.
Between preservation age and 60
Preservation age is the earliest age where you can potentially access your super. In order to access your super, you must not only meet your preservation age (table below) but also retire from any employment arrangements and satisfy the fund trustee that you do not intend to be gainfully employed for ten hours or more in any week in the future. If you are accessing super benefits between preservation age and 60 there may be tax consequences depending on the withdrawal amount and how it’s withdrawn from the fund.
| Date of Birth | Preservation Age |
| Before 1 July 1960 | 55 years |
| 1 July 1960 – 30 June 1961 | 56 years |
| 1 July 1961 – 30 June 1962 | 57 years |
| 1 July 1962 – 30 June 1963 | 58 years |
| 1 July 1963 – 30 June 1964 | 59 years |
| After 30 June 1964 | 60 years |
Meeting preservation age and starting a Transition to Retirement Pension (TTR)
If you have met your preservation age but intend to keep on working, you can access a portion of your super through a TTR which will pay you a regular income. A TTR can be used to supplement income if you reduce your hours at work or can help you save money on tax while maintaining your current hours. One of many important considerations with a TTR is that you are obligated to withdraw a minimum of 4% of the balance but no more than 10% each financial year.
Between 60 and 64
If you are between the age of 60 and 64 and have stopped working (regardless of how long for) you will generally have full access to your super benefit. You also have the option to go back to work and retain access to your super. In most cases, withdrawals from your super are tax free after the age of 60.
Reaching 65
Once you reach the age of 65, regardless of employment status, the balance of your super becomes unrestricted non-preserved, meaning that the funds are no longer preserved and you have the ability to access your super.
Here we have only discussed aged based conditions of release. There are other conditions where super can be legally released to a member, such as permanent or temporary incapacity, terminal illness, compassionate grounds, or severe financial hardship.
There are strict rules around accessing your super and if accessed incorrectly penalties apply. Before accessing your superannuation, it is important to seek advice from a professional adviser regarding your situation. There are also many things to consider before accessing your super including, tax consequences, impact on Centrelink payments, how it is accessed (income stream Vs lump sum) and longevity risk.
Information in this article is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information.
