Superannuation Rules for Over 57

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32 Comments

  1. Anton

    If I retire at 57 could I return to the workplace within 5 months

    Reply
    • Chris Strano

      In order to access your superannuation savings in full you need to have reached your superannuation preservation age and retire with no intention of returning to work. Should your circumstances change, you are able to return to work at a later date.
      Alternatively, you can commence a transition to retirement income stream after reaching your preservation age even if you are still working.

      Reply
  2. Christine R

    Hi
    I am at preservation age but under 60 and wish to get my superannuation as a lump sum as I am retiring due to ill health. My income for this tax year has been minimal, and my superannuation is under $100000, will this be taxed at 15% if I withdraw?

    Reply
    • Chris Strano

      A person is able to access their super if they have met their superannuation preservation age and has no intention of returning to full time or part time work.
      A superannuation balance consists of tax-free components and taxable components.
      You should contact your super fund and ask them how much of your balance is the tax-free component and how much is the taxable.
      All withdrawals must be made proportionate from each tax component (element). That is, you cannot choose which components form part of your withdrawal.
      The tax-free component of a super withdrawal is received tax free – regardless of age.
      The taxable component is generally assessed for tax under age 60; however, can be received tax-free up to the lifetime low rate cap amount.

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      Reply
  3. Miranda

    Hi Chris,
    Thanks for your service … much appreciated. I turn 57 next April, have lost my job, and would like to access my full super to pay off half my mortgage (which I can no longer afford to pay on a much reduced income – Newstart). I have about $126 000 accumulated I believe. Do you envisage a problem with this? How much would I expect to get taxed?
    Thanks for your help.
    Miranda

    Reply
    • Chris Strano

      Hi Miranda,
      To access your super in full, you need to meet a full superannuation condition of release. ‘Retirement‘ is considered a full condition of release. A definition of retirement includes reaching your superannuation preservation age, retired and no intention of returning to work.
      The tax on a lump sum super withdrawal depends on the components that make up your balance and the type of withdrawal (lump sum/income stream). You can contact your super provider and ask them what your ‘taxable’ and ‘tax free‘ components are. Tax Free components can be withdrawn tax free, regardless of age; however, there may be tax payable on taxable components. All withdrawals must be made proportionately from each component.Read here for more info on the tax on taxable components.
      Also, prior to making any withdrawals, you should consider if this will affect social security payments, such as Newstart.
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      Reply
  4. David

    Hi Chris

    I am 57 and experiencing some financial stress. Is there an amount that I can withdraw to help me through this difficult time? I work full time but had been employed for a few years.

    Thanks

    David

    Reply
  5. Mark FINLAYSON

    If I get my super at 57 can I go back to work 2months later fulltime

    Reply
    • Chris Strano

      Hi Mark, in order to access your super while under age 60 but over your preservation age, you need to satisfy the condition of retiring with no intention of returning to full-time or part-time work. It does not, however, prevent you from returning to work if your intentions change. This rule is not to be abused though.

      Reply
  6. Adela

    Hi Chris, I will be turning 57 next month, can I access at least 10% of my super while working on part time basis thank you

    Reply
  7. Michael Stephenson

    Hi Chris i was born 18/11/1961, i am fit and healthy so i plan to keep working till i am at least 65, but i need about $60,000.00 to fix my teeth can i access that amount TAX FREE?

    Reply
    • Chris Strano

      Hi Michael, in order to access a lump sum from super while over preservation age, but under age 60, you need to be fully retired with no intention of returning to work. If you are still working, you can only access your super via a TTR Pension, whcih gives you access to 10% of your account balance each financial year. Thereofre, a balance of $600k, could theoretically allow for $60,000 to be withdrawn. However, there are likely going to be costs for setting up a TTR and most probably tax on withdrawals while under age 60.
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      Reply
  8. Diane

    Hi I’m retired at 57 just turned,my husband is still working surrporting me,how much could I get out of my Supa not planning on going back working

    Reply
  9. gayle

    Hi ,I am 58yrs and work part time..I only have $65,000 in my super account.My husband passed away 7mths ago and im finding it a bit difficult money wise,I have a mortgage,would i be able to get a lump sum to pay towards this?

    Reply
    • Chris Strano

      Hi Gayle, I’m very sorry to hear about the passing of your husband. At your age, you can only generally access a lump sum from your super if you are retired with no intention of returning to full-time or part-time work. Part time is defined as 10-30 hours per week. You can, however, commence a transition to retirement income stream after reaching your preservation age. A transition to retirement pension allows you to draw up to 10% of your balance each year, which may assist with meeting your commitments.
      Related posts:
      What is My Preservation Age?
      What is A Transition to Retirement Pension?

      Reply
  10. Lex Brander

    Hello Chris, I have just reached my preservation age of 57, but I have been unemployed since I was made redundant at 49. The questions I have are as follows, 1/ Can I access an income stream from my super? 2/ Can I access all of my super? and which one would minimise my tax? I’m fairly confident that I won’t be finding employment again and I would love to pay off my mortgage. What questions should I be asking my super provider, as of course, I would like to minimise the tax I would need to pay. I’m just a few hundred shy of $900,000 in my super account. Thx

    Reply
    • Chris Strano

      Hi Lex,
      In order to have full access to your super, you need to have no intention of returning to full-tims or part-time work (retirement super condition of release). This will give you unrestricted access to your super. However, as you say, you need to be mindful of tax implications in accessing your super. Your super can comprise of three tax components: tax-free, taxable (taxed) and taxable (untaxed). Each of these are taxed differently depending on the form in which you access your super (i.e. lump sum or income stream). In saying this, the tax-free component will always be received tax-free, regardless of age. You can see how the taxable portions will be taxed in this article. All super withdrawals, whether taken as an income stream or lump sum, must be proportionate from each component.

      If you do have an intention of returning to work, you cannot meet this ‘retirement’ condition of release. However, you should still be able to have limited access to your super via a transition to retirement income stream.
      Your first step should be asking your super fund what the tax components are that make up your super balance.
      Based on your stage in life, intentions, and reasonable superannuation balance. I would suggest seeking professional financial advice, as it can be difficult to navigate super rules, not to mention being in a position to maximise the effectiveness of your retirement plans. If you do not have an adviser, please feel free to view our website to see if we can assist https://www.torowealth.com.au/.
      All the best,
      Chris

      Reply
  11. Nicky

    Hi my husband has a terminal illness and he can no longer work and I also am not working to care for him, are we able to access his super which is under 100,000. Thanks Nicky

    Reply
    • Chris Strano

      Hi Nicky, I am very sorry to hear about your husband’s health. It must be a very difficult time for you.
      In order to access super in full, a person needs to meet a superannuation condition of release.
      A condition of release includes a terminal medical condition. See here http://www6.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_reg/sir1994582/sch1.html
      A terminal medical condition is defined as a condition wehre two registered medical practictioners have certified (jointly or spearately) that the person suffers from an illness that is likely to result in death within 12 months. At least one of the practioners needs to be a specialist relating to the illness. See here 6.01A for details https://www.legislation.gov.au/Details/F2012C00564
      I would suggest calling your husband’s super provider and asking what the process is to withdraw his super.
      Alternatively, if he is over his super preservation age, he should be able to access his super in full, without meeting the medical requirements listed above.
      Be mindful of taxation on super withdrawals. He may be able to utilise the low rate lump sum withdrawal cap https://www.ato.gov.au/Individuals/myTax/2018/In-detail/Medicare-items/?page=17

      Reply
  12. klaus

    hi Chris I`ve just turned 57 can i access part of my super approx $150.000 to pay out a reverse mortgage which is still an investment, or do i need to stop working

    Reply
    • Chris Strano

      Hi Klaus,
      Once you reach your superannuation preservation age, you can have limited access to your super via a transition to retirement income stream, even if you are still working. Tax will usually be payable on the income while under age 60.
      If you would like to make a lump sum withdrawal, you generally need to meet a full condition of release which, based on your age, would require you to require with no intention of returning to full-time or part-time work.
      Regards,
      Chris
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      Reply
  13. Bron

    I have reached my preservation age of 57. If I decide to Retire and take my super as a lump sum, then in the future decided that I wanted to return to Full-Time work, how soon after Retirement could I return to work?. Thank you

    Reply
  14. Troy Russell

    Hi Superguy,

    I am turning 57 on boxing day. I would like to access my super but not all of it, I would like to take a small amount say $10000 dollars. Is it true that I have to wait until I turn 58, in a year, until I can access it? Or is there another way? Thanks in advance.

    Reply
  15. Christine Hilton

    Hi there I’m 60 & my husband is almost 63. He’s working full-time & I work 2 casual jobs. We’ve had a SMSF property for 6-years & the funds are totally in the property with no cash. The rent & our employer super payments cover the outgoings. When is the earliest and/or the recommended time to sell the property & can we use the money for whatever? It has a loan on it & our home we live in also has a loan. Thankyou!

    Reply
    • Chris Strano

      Hi Christine,
      Thank you for your question.
      In general, an investment (including a property) within an SMSF can be sold at any time. The associated loan would most likley need to be paid out when the property settles.
      If you sold the property, the net proceeds would remain within the SMSF and could be invested as you see fit, provided it is line with the SMSF Investment Strategy.
      In regards to accessing your super in full, you need to meet a full superannuation condition of release by meeting the definition of retirement for superannuation purposes, or reaching age 65.
      You can, however, have limited access to your super via a TTR Pension while you are still working, provided the Trust Deed of your SMSF allows for it.
      Hope this helps.
      Regards,
      Chris
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      Reply
  16. Fi Holton

    Hi Chris,
    I live in the UK and have a preserved pension in Australia when I lived there for 7 years.
    I am 58 and I understand I may withdraw some funds, either as a lump sum or an income stream. I work 30 hours per week and do not currently intend to retire. What would be the best option for me tax wise?
    Many thanks

    Reply
    • Chris Strano

      Hi Fi, the tax components of your super, your residency status and any other taxable income will all impact the tax you pay on super withdrawals. If I were you, I would also double-check your ability to make lump sum withdrawals, as you may not have yet satisfied a full superannuation condition of release. Either way, given your circumstances, I would suggest speaking with your super fund about your withdrawal options and discuss tax implications with an accountant – maybe one based in Australia.
      Regards,
      Chris
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