This article addresses whether you are able to access your superannuation savings at age 55 and still continue to work.
It will also explain how much tax might be payable and when you can access your super tax free.
You may have heard of people in your workplace or friends and family talking about how they are using their superannuation to supplement their work earnings, or using a ‘transition to retirement strategy‘ as a means of reducing their personal income tax.
Let’s begin with when you are able to access your superannuation and then if you can access your super at 55 and still work.
In order to draw on your super, you need to have first met your superannuation preservation age.
If you have not reached your superannuation preservation age (preservation age calculator here), the only way you are able to access your super is to be disabled (limited access) or suffering from financial hardship.
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Accessing Superannuation At Preservation Age
Your superannuation preservation age signifies the earliest age that you are able to begin withdrawing from your super. However, you may need to satisfy other criteria too.
The Preservation Age was once as low as 55; however it is progressively increasing to age 60. The table below details the Superannuation Preservation Age based on your date of birth:
| Date of Birth | Superannuation Preservation Age |
|---|---|
| Prior to 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 |
| On Or After 1 July 1964 | 60 |
There are two ways of accessing your superannuation once you have reached your Preservation Age. One requires you to stop working and the other way allows you to access your super and still work.
Looking at the table above, you are only able to access your super at 55 and still work if you were born prior to 1 July 1960; otherwise you will have to wait until you reach age 56, 57, 58, 59 or 60 before accessing your super – depending on when you were born. These are the ages that matter for accessing superannuation in Australia.
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Accessing Super While Still Working
Provided you have met your Superannuation Preservation Age, you are able to commence a Transition to Retirement (TTR) Pension while you are still working. There is no need for you to stop working whatsoever. A TTR Pension may also be referred to as a Transition to Retirement Income Stream (TRIS) or Non-Commutable Allocated Pension (NCAP) – they all mean the same thing.
For the purposes of this article, I will refer to it as a TTR Pension.
[Watch my video below – Can I Access My Super At 55 and Still Work?]
Accessing Superannuation: TTR Pension
You can access your super after age 55 (or whatever your Preservation Age is) by commencing a TTR Pension with some or all of your superannuation accumulation account (subject to the Transfer Balance Cap from 1 July 2017 as part of the new super rules – click to read more).
A TTR Pension allows you to withdraw between 4% and 10% of your TTR Pension Income Stream balance each year, as calculated on 1 July of each year. This amount is calculated pro-rata if the TTR Pension commences part way through a financial year.
A TTR Pension does not allow you to make lump sum commutation withdrawals from the pension account. All withdrawals must be in the form of pension payments between the 4% and 10% prescribed limits.
Also, if you have reached age 55 (or your Preservation Age) and are still working, you are unable to make lump sum withdrawals from your superannuation accumulation account.
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Accessing Superannuation in Full at Preservation Age
A TTR Pension allows you to access your superannuation after reaching your Preservation Age while you are still continuing to work. However, as discussed above, this will only give you limited access (i.e. between 4% and 10% of your TTR Pension balance each year).
To have full, unlimited access to your superannuation you need to meet one of the three definitions of ‘Retirement‘.
One such definition includes “in the case of a person who has reached their preservation age that is less than 60: an arrangement under which the member was gainfully employed has come to and end and the trustee of the superannuation fund is reasonably satisfied that the person intends never to again become gainfully employed, either on a full-time or part-time basis”
In simple terms, this means that you have full and unlimited access to your superannuation if you cease work after reaching your Preservation Age and never intend on returning to work on a part-time or full-time basis.
However, you are only able to access the superannuation savings that have accumulated up until that point. Any subsequent contributions after meeting the superannuation ‘retirement’ condition of release noted above will be inaccessible until you meet another condition of release.
Under these circumstances, you can access your super as an ordinary account based pension income stream or as a lump sum withdrawal (or a combination of the two)
Returning To Work After Accessing Superannuation
If you are under age 60 and accessed your superannuation via a TTR Pension, as noted above, there is no requirement for you to stop working. You are able to continue working throughout.
If you are under age 60 and met the superannuation ‘retirement’ condition of release by ceasing work with no intention to return, you are still able to return to work. Take note of the language used… no intention to return to full-time or part-time work…. This doesn’t mean that you can’t return to work; it just means that at that time you genuinely had not intention of returning to work and if someone were to objectively look at your life at the time you made such claims, all of your personal and financial circumstances would suggest that you had no intention of returning to work.
There is nothing to say that your intentions haven’t changed.
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When Can I Access My Super Tax Free?
Everyone wants to know when they can access their super tax free!
There are two main tax components that make up your superannuation balance. The ‘Taxable‘ component and the ‘Tax Free‘ component. The ‘Taxable’ component is further broken down into the ‘Taxable (taxed)’ component and the ‘Taxable (untaxed)’ component.
Contact your superannuation provider to find the component mix of your superannuation balance. Everyone’s balance will be made up of different proportions of these components.
Accessing Super – Income Streams
If you are above your preservation age, but under age 60, the ‘Tax Free’ Component of an income stream will be received by you completely tax free. The ‘Taxable (taxed)’ component will be taxed at your Individual Marginal tax Rate (MTR) minus a 15% offset, and the ‘Taxable (untaxed)’ component will be taxed at your MTR with no tax offset.
If you are over age 60, the Tax-Free and Taxable (taxed) components are received completely tax free and not assessed for tax. The Taxable (untaxed) component is taxed at your MTR minus a 10% offset.
Accessing Super – Lump Sums
If you are above your preservation age, but under age 60, the ‘Tax Free’ Component of a lump sum withdrawal will be received by you completely tax free. The ‘Taxable (taxed)’ component will be received tax free up to a lifetime indexed limit of $205,000 and taxed at 15% for any amount in excess of $205,000; and the ‘Taxable (untaxed)’ component will be taxed at 15% for the first $205,000, 30% for amounts between $205,000 and $1.480M (indexed) and 45% for amounts in excess of $1.48M.
If you are over age 60, the Tax-Free and Taxable (taxed) components are received completely tax free and not assessed for tax. The Taxable (untaxed) component is taxed at 15% up to the lifetime indexed cap of $1.48M and 30% for any withdrawals in excess of $1.48M.
Click here to read more about Tax on the Taxable Component or here to understand more about the Tax Free Component.
Hopefully this article has given you a good understanding of whether you can access your super at 55 and still work and you can begin to understand how all of these rules affect the average retirement age in Australia.
Chris Strano
Chris Strano created SuperGuy to help the average punter navigate through the complex and ever-changing super rules. It has since become one of Australia's leading digital super resources. If you’re looking for more personalised advice, have a chat with one of our experts at www.superguy.com.au/need-advice
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Hi my name is mary im 62 and work 3 days aweek can i take a small amount out of my supper which is 98000 at this moment
Thankyou
Hi Mary,
If you have had an employment arrangement come to an end after reaching age 60, then you can apply to have full unrestricted access to the level of super you had at that time.
Alternatively, because you are over your preservation age, you can start a transition to retirement (TTR) pension, which allows you to withdraw up to 10% of your account balance each year – regardless of your employment status.
I suggest you contact your superannuation provider or contact a financial adviser to discuss your options based on your personal situation.
Hi can you access your Super via the TTR stream at any time of the year or is it only able to accessed in July?
Hi Kelly, any time of the year is fine. The minimum poension icnome requiirement of 4% will be calculated on a pro-rata basis and the maximum of 10% will remain at 10%, regardless of the time of year.
Hi my name is Janelle and I am 57 soon to be 58, I work a couple of days a week. I don’t have a large amount in my super but I am finding it a bit tough, as I have reached preservation age can I apply to have an amount each fortnight directed to me.
Hi Janelle,
A person is able to access their superannuation if they have reached their superannuation preservation age. Click here to see preservation ages based upon date of birth.
A person who has retired with no intention of ever returning to full-time or part-time work has met a full superannuation condition of release and can have unrestricted access to superannuation savings, after declaring to the trustee of their super fund that such an event has occurred. However, tax may be payable on withdrawals if under age 60.
If a person has reached their preservation age, but does not intend to permanently retire, they can still access their super via the ‘transition to retirement’ provisions, which allows the member to nominate an income of between 4% and 10% of their account balance each financial year. The frequency options of the payments are determined by the superannuation provider, but are most often monthly.
Again, tax may be payable. Read here for more about tax on the taxable components.
Hi can you access a lump sum of your super when you turn 60 and are still working
Hi Jennifer, under normal circumstances, you can only access a lump sum under age 65 if you had an employment arrangement come to an end when you were over age 60 (even if you returned to a new job after that employment arrangement came to an end). If this has not occured, your only other option is generally to commence a TTR pension, whcih can provide you with up to 10% of your account balance each financial year as pension payments.
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Hi,
I will be 59 in June this year, reached my preservation age of 55 being born before 1st July 1960. I am a single person, work permanent part time, fall into the low income bracket, and don’t have the financial means to purchase a car cash or able to afford to purchase a car under finance. Is there a way for me to withdraw a lump sum from my super to purchase a car which I need to get to work and for general living. I am not in receipt of any Centrelink payments, so how can I do this?
Thank you
Hi Marie, having reached your preservation age, you should be able to use your super to start a TTR pension, which allows you to receive a pension income up to 10% of your account balance each financial year. You are usually unable to access your super as a lump sum while under age 65, unless you have retired.
Speak to your super fund about your ability to start a TTR pension, but be aware that there may be CGT implications, transaction costs, etc. because you are basicaaly transferring your super savings to a new account. Also, being under age 60, some or all of the pension income received will likely be taxable in your own name. There is also a requirement each year to draw a minimum pension income amount, which will reduce your super savings, but you can return your TTR pension back to accumulation phase after you have withdrawn the money you need.
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HI
I am at preservation age of 57 born 17th Nov 1961 at present a I work 3 days at week and super is paid into one of my super accounts. The other account sits dormant, can I change that one into a TTR Pension Account and keep the other for Work? Can I also use my super to purchase a car or borrow against it?
Hi Vicki-lee, yes you can commence a TTR pension with one of your accounts and keep the other one for work contributions.
See below for answers to your other questions.
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Hi Chris,
I’m 57 still working full time and renting, can I use my super for part of deposit to buy a house or borrow against it.
thanks
Hi Lili,
If you are still working, you are usually only able to have limited access to your super in the form of a transition to retirement (TTR) income stream if you have reached you superannuation preservation age. A TTR income stream allows income payments of up to 10% of your account balance each financial year. If you have not reached your preservation age, you are generally unable to access your super.
Hope this helps,
Chris
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Hi Chris,
I’m Maria, my inquiry is about buying a home to live in as a deposit with Super… is it really possible … I have around $100000 in super…I’ve inquired before about the SMSF… but I didn’t ha e enough.. advised it was too costly.
Thank you
Hi Maria, nice to meet you! The only way that you are able to use your super to buy a house to live in is if you have met a superannuation condition of release, such as retirement over your preservation age, or reaching age 65.
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Hi Chris
If I have taken a lump sum of $80,000 from my superannuation under the preservation rules (I am 57) and my circumstances have changed and I need to return to work within the same tax year that I received the payout, what would be the tax implications for that $80,000? Would it be impacted by my return to work income for that tax period and I end up having a tax debt on the superannuation lump sum?
Hi Cheryl,
Your return to work is irrelevant when determining the taxation of a superannuation withdrawal. Provided the taxable component of your withdrawal was under the lifetime low-rate cap amount, no tax should be payable. This should be confirmed by your accountant.
Trying to find an answer to question , someone told me I could withdraw my super at age 55 sign a document never to work in Australia again , an move overseas is this correct or is it illegal
Hi Brian, the first step is to determine if you have reached your superannuation preservation age. The earliest preservation age is 55; however, yours will depend on when you were born. If you have reached your preservation age and are retired with no intention of working again, then you can generally access your super in full. Just be mindful of potential tax payable upon withdrawal.
Chris
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