You can withdraw your superannuation at 55 if you have reached your superannuation preservation age.
You will have limited access to your savings if you are still working, but may have full access to your super in the form of an income stream or lump sum if you have permanently retired.
There may be tax consequences associated with withdrawing your superannuation under age 60, as discussed below.
If you were born prior to 1 July 1960 you may be able to withdraw your super at 55 under the superannuation retirement rules.
You need to understand the retirement rules to determine the amount that you are able to withdraw and the way in which you can withdraw it.
Age 55 is the Preservation Age for people born prior to 1 July 1960.
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The Preservation Age for people born after 30 June 1964 is age 60.
If you were born in between these dates, your Preservation Age will be somewhere in between, as detailed in the table below:
| 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 |
Can I Access My Super at 55 and Still Work?
If you have reached age 55 and are still working, or intend on returning to work, you should be able to access your super via a Non Commutable Account Based Pension.
A Non Commutable Account Based Pension may also be referred to as one of the following:
Non Commutable Allocated Pension
Transition to Retirement Income Stream (TRIS)
Transition to Retirement (TTR) Pension
In this instance, you commence an income stream with some or all of your superannuation savings and must draw an income stream between a minimum of 4% and a maximum of 10% of the capital value of the pension, as calculated on 1 July of each year.
For example, let’s say you are 58, still working, and plan on commencing a Non Commutable Pension on 1 July using your total superannuation savings of $500,000.
In the first year, you would be required to withdraw an income of between $20,000 (4%) and $50,000 (10%).
If your balance had reduced to $480,000 by the following 1 July, you would then need to withdraw an income somewhere between $19,200 and $48,000 for the year.
In a Self Managed Superannuation Fund (SMSF) these payments can be taken whenever you like.
However, a regular monthly payment or one-off lump sum is recommended for ease of management and administration.
If you have a retail or industry account, you will generally receive payments monthly, quarterly or annually.
You cannot withdraw more than 10% or less than 4% in any one financial year under the transition to retirement rules.
This is how you can access your super at 55 and still work.
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Can I Withdraw My Super at 55 if Retired?
In most cases, you are able to withdraw your super, with no limitations, if you have reached your Preservation Age (55 if born prior to 1 July 1960), have retired and have no intention of returning to work.
However, there may be tax implications on the portion of your withdrawal that includes a taxable component.
The tax-free element of the withdrawal will always be received tax free.
You can find out the tax components of your balance by contacting your superannuation provider.
All withdrawals must be made proportionately from each tax component.
If you have met the superannuation definition of retirement, you should be able to withdraw some or all of your super as a lump sum and/ or use some or all of your super to commence an income stream.
Where you have met the definition of retirement, there is no need for the income stream to be non commutable. You can commence an ordinary Account Based Pension.
This main differences between a TTR Pension and ordinary Account Based Pension is that you are not limited to a maximum income of 10% each year with an ordinary account based pension.
Also, all earnings derived from investments in an account based pension are received tax free; whereas earnings within a TTR Pension are taxed at the same rate as Accumulation Phase – up to 15%
Why Would I Withdraw My Super at 55?
Superannuation is a tax effective environment, whereby all earnings received from assets within super are taxed at a concessional rate or received tax free if in pension phase (excluding TTR Pension).
Therefore, superannuation is a good place to invest.
However, you may wish to withdraw your super for the following reasons:
1. As part of a Transition to Retirement Strategy
2. Withdrawing super to reduce or pay off debt, such as a mortgage or credit card.
3. To assist with covering living expenses.
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Your individual circumstances will determine whether it is beneficial for you to access your superannuation.
The intention of the Government allowing you to access your superannuation at 55 (or whatever your Preservation Age is) was to allow you to ease into retirement and hopefully work a few more years.
Even working part time and supplementing your income with partial draw downs from a super income stream can reduce the stress on social security.
The Government hopes this would allow you to save more for retirement, pay more taxes by continuing to work, draw down less on your savings (compared to being fully retired) and prolonging your request for the Age Pension.
This is all part of the Government’s plan to reduce the impact baby boomers are having on our economy now that they are all beginning to reach the average retirement age.
The evolution of the TTR Pension has seen full time workers take advantage of these measures by making concessional contributions to super and then withdrawing tax-effective or tax-free income from super.
Referred to as a TTR Strategy, this can reduce the amount of income being taxed at marginal tax rates, while still providing an individual with the same net, after-tax income.
I have shown a working example of a Transition to Retirement Strategy here.
A Transition to Retirement Strategy can be employed with or without a SMSF.
Tax Consequences of Withdrawing My Super at 55
Withdrawals made from superannuation by a member over the age of 60 are received tax free (unless the balance includes a taxable (untaxed) component).
Superannuation withdrawals made under age 60 will usually include assessable income.
Let’s break it down.
Your superannuation is made up of two main components – the Taxable and the Tax Free component.
The Tax Free component of your balance consist of contributions made to your super account where a tax deduction was not claimed (non-concessional contributions).
The Taxable component represents the remainder and effectively includes SG contributions, Self Employed contributions, Salary Sacrifice contributions, plus earnings received in accumulation phase.
Withdrawing Super at 55 – 59: Income Stream
When you commence an income stream, all earnings and withdraws will be proportionate between these components.
For example, a 57 year old has a super balance of $500,000 which consists of $50,000 Tax Free components and $450,000 Taxable components.
By commencing an income stream, these proportions become static upon commencement – 10% Tax Free and 90% Taxable.
All earnings from investments within the pension account will be allocated in this proportion.
All income withdrawn into personal bank accounts must also be proportionate.
If this member opted for minimum required pension payments of 4% or $20,000 in the first year, $18,000 (90%) of this payment would be from the Taxable component and $2,000 (10%) from the Tax Free component.
From a personal income tax perspective, this $2,000 would not be counted as taxable income.
The $18,000 would be taxable at the recipients marginal tax rate; however, a tax rebate (not deduction) would be received equal to 15% of the $18,000 Taxable Portion, which would be $2,700.
Once the recipient reaches age 60, all income would be received tax free, as it is exempt pension income, assuming the balance does not include the uncommon taxable (untaxed) component.
Withdrawing Super at 55 – 59: Lump Sum
You are able to access your super as a lump sum if you have reached your Preservation Age and permanently retired.
If you are aged between 55 – 59, tax may be payable on the ‘Taxable Component’.
However, you have a lifetime lump sum low rate cap where benefits can be received tax free.
The low rate cap in the 2019/20 financial year is $210,000.
This means that you can make lump sum withdrawals from the Taxable (taxed) component up to $210,000 at any stage between age 55-59 without paying tax on the withdrawals.
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Withdrawals must still be made proportionately from components; however withdrawals from the Tax Free component do not count towards the cap.
If any part of your balance includes the Taxable (untaxed) components (not overly common), lump sum withdrawal tax of 15% up to the lifetime cap of $210,000 is payable; 30% between $210,000 and $1.515M; and 45% for amounts over $1.515M.
These amounts exclude Medicare and other levies.
Withdrawing Super Over Age 60
If you are over age 60 and still working, you can access your superannuation via a TTR Pension.
All income should be received tax free, excluding any taxable (untaxed) component.
If you are over age 60 and have met the superannuation definition of retirement, you may have unrestricted access to your super.
When over 60, the definition of retirement can include working after retirement under the working after retirement rules.
What Age Can I Withdraw My Superannuation?
As you can see, there are a few circumstances that affect what age you can withdraw your superannuation.
There is no single superannuation withdrawal age.
In an attempt to summarise:
- The earliest age you can access your super is your Preservation Age (use this Preservation Age calculator)
- Provided you have met your preservation age, you can access your super via a TTR Pension in all circumstances
- If you are under age 60 and retired with no intention of returning to work, you can have unrestricted access to your super
- If you are aged 60 or over, you can have unrestricted access to your super if you meet the superannuation definition of retirement
- If you are aged 65 or over, you have unrestricted access to your super, regardless of your employment status
Once you have accessed and withdrawal from superannuation, you can use it at your discretion.
For example, the withdrawal can be used to pay off debt, put onto your mortgage, buy a car, buy a house, or simply cover retirement expenses.
Accessing Superannuation has strict rules. You should consult an adviser and/or speak with your superannuation provider prior to making withdraws from your superannuation account.
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 Chris
I will be 55 in May 2015 and am looking at withdrawing a lump sum from my superannuation to pay out debt and buy a new car. I would like to put the remainder of my super into an income stream.
The lump sum amount I would require would be more than 10% of my super balance. In this scenario do I need to declare retirement or am I still able to work part time?
If I have to declare retirement I am aware I can work for less than 10 hours a week. Is there a maximum dollar value on the amount that I could earn as I am self employed?
Thank you, I am looking forward to your reply.
Hi Keith
Here is a link. http://www.austlii.edu.au/au/legis/cth/consol_reg/sir1994582/s6.01.html Scroll to the bottom for a definition of retirement. This includes someone who has reached preservation age but under age 60 and has no intention of returning to work on a fulltime or part time basis. This is what you would need to satisfy to make a lump sum withdrawal.
I haven’t heard of a maximum amount that can be earned in <10 hours and I see your perceived opportunity. My best guess would be that the amount you earn would need to be an amount reasonably expected to be earned in less than 10 hours given your trade/profession. But that's only a guess. I will come back to you on this one. Let me know if you find anything out in the meantime.
Hello Chris, I am 59 years now, I am working full time, can I take out all of my Super as a lump sum, tax free, NOW? It is a SMSF. The total is under the $185,000. I work for my own Pty Ltd Company. If not, can I take it all, as a lump sum, tax free, when I turn 60, (still working) ? Thank You for any help.
G’day Martin
In order to access your superannuation you need to meet a Condition of Release. The main retirement conditions of release include 1. permanent retirement after age 55 2. ceasing an employment arrangement after age 60 or 3. reaching age 65. Reaching age 60 will not change your superannuation preservation status UNLESS you cease an employment arrangement. This allows you to access your super at that point in time, even if you take up another employment arrangement. Failing that, you have the ability to commence a TTR Income Stream; however you would be limited to 10% of your account balance each year.
Hi Martin, I am 57, working part-time and would like to take out most of my super balance. I have about $90,000 in super, all of it accumulated through mandatory contributions, own and employer. I could sign a release for that I am only intending to work 10hrs or less in the future, which certainly is my intention. However, circumstances can change and I might not be able to realize my intention, neither in the short or long term. Will I be able to go back to work? Will anybody control my working hours? Will I be able to rejoin a Super fund. I guess what I am asking is this: Is the condition of release form an administrative requirement or is it actually enforced. Do I get special ‘R’ stamped in all my papers ?
thanks for your advice
kindest
M
Hi Mike, great question. My interpretation of this rule is that it must be your intention never to return to work and all of your circumstances at the time of signing the release must support your intention. I am not aware of any enforcement of this such as a ‘retired’ status being permanently associated with your name that may limit your ability to seek work in the future or open another super account. I believe that it is purely an administrative requirement and you would need to prove your case (intention) if you were ever audited.
I’m turning 57 this month,unemployed a month ago.I’m suffering financial hardship,Last January 2014 up to December 15 2014 I received a family assistance from Centrelink,I’m planning to apply for financial hardship on my super am I qualified for it even I don’t received assistance from centrelink at this time…..
Great question. I suggest you read section 19.67 of this http://www.alrc.gov.au/publications/19-superannuation-law/gaining-early-access-superannuation-0. This may apply to you. You need to ensure your payment was a Commonwealth Government Income Support payment. If you believe you satisfy this criteria, you should contact your superannuation fund and explain your situation.
Hi Chris, I am the sole Trustee of my SMSF Which has a value of about $70,000 only. I am 57 and retired permanently. The accounting/auditing fees aren’t worth it and I would like to withdraw all the funds. I did a salary sacrifice of about $38,000 into the fund some years ago. Q1: Will the $185,000 tax free threshold apply to the full $70,000? Q2: I have losses carried forward of $20,000 – can these be utilised in any way? Q3: what happens to the SMSF when I take out all the funds ie do I have to pay to have it wound up or what do I need to do? Thank you so much for your great website and all the helpful information you are providing.
Hi Lyn
I’m glad you are getting value from the site! Thanks for the feedback.
1. The $185,000 should only apply to the ‘taxable (taxed)’ component of the $70,000 – just make sure you do not have any taxable ‘untaxed’ components and make sure that you have not made any previous lump sum withdrawals from super.
2. Unfortunately the losses will remain with the SMSF – if someone else (say a family member) took over the SMSF they may be able to utilise the losses, but this is a messy option and generally best to stay away from for a number of reasons.
3. You should leave sufficient funds to cover final expenses, such as winding up the fund, paying any remaining taxes, remaining levies, etc. Discuss with your accountant.
In all of the instances above, it is highly suggested that you discuss with an adviser/accountant/smsf specialist. You will need one of these for winding up the SMSF anyway, so just make sure they help you tick all the boxes.
Hello Chris,
I was a member of a Public Sector Super fund and reached my preservation age (55) and recieved a lump sum payout. It has been a few years since recieving the lump sum and since then my financial circumstances have hanged. At the time of my payout I signed a declaration stating that I did not intend to work again but find that in the not too distant future I may need to return to either full time or part time employment. Are there any restrictions related to my returning to work, and should I contact my previous super fund administrators for clarification on my ability to return to work.
Hi Errol
sorry for the late reply, I somehow missed the comment.
I believe that you should be fine to return to work, as your intention at the the time of signing the declaration was not to return to work.
It wouldn’t hurt to run it past the previous super fund administrators just to reconfirm what you signed.
I have stopped working permanently and have reached the preservation age. I have withdrawn $200,000 from my super this financial year and the appropriate tax was withheld at the time, and I intend removing the remaining funds next financial year. Because I have stopped work and have no income this year, will the $200,000 I have withdrawn be treated as income and if so how much tax can I be expected to pay this year.
Hi Jeremy
If you are over age 60 all withdrawals are received tax free (unless you have an ‘untaxed’ component – ask your super provider).
If you are aged 55-59, the tax-free component is received tax free and the taxable (taxed) component is also tax free up to a lifetime limit of $185,000 (which you may have used all or part of in your initial withdrawal). The taxable component withdrawals above the $195,000 are generally taxed at 15% plus medicare.
Therefore, the amount of tax you will pay will depend on your age, the level of lifetime cap you have used and the taxable component ratio of your balance.
All withdrawals must be made proportionately.
Please confirm all of this with your superannuation fund (they will answer questions on this) and your tax accountant.
Hi – must struggling to understand the “Taxable” and “Non Taxable” components of my superannuation. My superannuation statement does note taxable and non taxable components.
I am 55 years of age (born April 1960) and recently retired. I have a total of $90,000 in my superannuation account and would like to withdraw this as a lump sum. I have always worked in the private sector and have never made any personal contributions to my superannuation.
Will I be required to pay tax on a lump sum withdrawal of $90,000 – or am I saved from paying any tax due to the fact the amount falls within the “low cap”.
Many thanks for your help.
Hi Fiona
The tax components are generally only available to you if you contact your superannuation provider. I’m not sure why they are never displayed on statements – maybe they are trying to avoid any confusion.
Anyway, based on what you have said, it is likely that your total balance is made up of the taxable component as your employer has presumably made all the contributions.
You should have the ability to draw up to $195,000 without paying tax. Beware that this is a lifetime limit, so any previous withdrawals will count towards this cap.
Also, if your account includes a ‘taxable (untaxed)’ component’, you may be required to pay tax. These components are not so common these days, but you should check anyway.
With any tax matters always double check with your superannuation provider and/or accountant.
Hey Chris,
I have a scenario for you that I would like to get answers for I hope that is OK ?
I have a friend who is aged 61 years old now.He is still working and has a unpreserved lump sum
of $80 K.
He wants to withdraw this lump sum and use a portion of the money on home maintenance/ renovation work at his principal place of residence. Is this an allowable thing to do ? What tax would be payable ? ie if any ?
Kind regards
Terry
Hi Terry
There are 2 types of ‘non-preserved’ amounts. These are ‘restricted non-preserved’ and ‘unrestricted non preserved’. You friend will need to determine this before considering any withdrawals. This will determine whether he can access his super in full or not.
Generally, no tax is payable on withdrawals for someone over age 60 (unless the balance includes a ‘taxable (untaxed) component’ – he needs to ask his super provider).
Here is a good 1 page guide on preservation of superannuation benefits http://www.mlc.com.au/resources/MLC/Marketing/Static%20Files/pdf/what_does_preservation_mean.pdf
I hope this answers your question
Hi Chris
I’m 57 and work less than 8hrs per week. I withdrew lump sum $65k from my super 3/2015 for financial reasons. Seeing how there was no UNTAXED COMPONENT I’m assuming I will not have to pay tax?? I am hopeful of receiving an inheritance of which I would like to put back into my super. My superfund account is still open. Is it as simple as just depositing monies into my super account ? Or do I have to set up my own personal super account. Would appreciate your thoughts???
PS: what an informative site you have. Thankyou.
Cheers
Sue
Good Morning Sue!
That’s correct, no tax is generally payable on the first $195,000 withdrawn. Beware that this is a lifetime limit, so any previous withdrawals will count towards this cap. And, if you intend on making any future withdrawals you will need to remember that the cap will be reduced by this $65,000 (plus any previous withdrawals).
You are able to contribute money back into super until age 65 – at which stage you will need to meet a work test to continue contributing.
I’m not sure what you mean by ‘setting up your own personal super account’. All super accounts are personal – unless it was an employer defined benefit arrangement.
It should be as simple as depositing all or part of your inheritance back into your super account. Keep in mind contribution limits.
Maybe contact your superannuation provider to confirm your account is still open.
If you have a SMSF – contact the fund administrator/accountant.
I’m glad the site provides you with value – thank you for your comments!
Hi Cris, I am 56 still working and have received my first TTR yearly payment from my Super pension account. I now want to top up my pension account and have been advised that I will need to start a fresh pension account. If this is correct does this mean that I can receive a second payment in the same financial year?
Hi Joe
I believe this is correct. Pension payments from a previous pension should not affect your pension payment thresholds for a new pension formed from a refresh. However, this ‘strategy’ is on the ATO radar to ensure it is not abused
Thanks Chris , appreciate your reply.
Best Regard, Joe N
Hi Cris
I am 56 years old and my position was recently made redundant. I have super of around 60k, that I would like to access to pay off my car and put the rest on the mortgage to ease the burden on my partner. I know that because I am not employed currently, I can most likely access my money, but I do want to continue to work however, and would like to know if there are any penalties for returning to work even part time after I receive my money- Many thanks -Lynn
Hi Lynn
You can only have full access to your superannuation at your age if you are permanently retired with no intention of returning to work (or if you have unrestricted non-preserved components).
However, you can have partial access to your super via a transition to retirement income stream; however this will limit your access to 10% p.a. of your account balance.
Under age 60, part of your super withdrawals/income may incur tax.
I would suggest discussing the particulars of your situation with your adviser/accountant or your superannuation fund
hi chris
i turn 60 in jan work full time have about 100000 in super and salary sacrifice 25000/ year hopefully continue to 66.5. would like to buy a caravan and was inquiring can i access this amount or can i access only 10% of amount. also i have super in private super my fees have increased to 188/month am now considering rolling over to a industry fund any help would be greatly appreciated as no sure where to go to from here
regards Barrie
Hi Barrie!
you can only access lump sums from super if you permanently retire with no intention of returning to work or cease an employment arrangement over age 60 (even if you enter into a new arrangement).
However, you can commence a non commutable income stream while you are still working whereby you can withdraw up to 10% of the balance each year.
In relation to your super fund, fees are important to consider. If you do not feel that you are getting good value, you should consider another fund or contacting your current fund to see how fees may be reduced.
Hi,
If I take out my $195,000 supposedly tax free pension as a 56 year old what happens if a year or so later I am offered full-time work? Can I do this and are there any consequences?
Hi Helen, this is possible provided at the time of accessing your superannuation you were permanently retired with no intention of returning to work. All of your personal circumstances need to suggest that you had no intention of returning to work. You are able to then accept full time work a year later; however any subsequent contributions to superannuation after recommencing work will be inaccessible until you meet another condition of release.
I am very sorry for the late reply. For some reason my comment notifications were turned off.
hi chris I am 56 years old and am planning to stop work I have about 38,000 in my transistion to retirement account and about 10,000 in my super company account if I take out say 33,000 from my transistion accout and leave the rest in their will I have to pay tax on the withdrawl and say if I want to return back to work after 6 months can I do so I want to put what will be left from my withdrawl with my company super account together and leave it in their
Hi Maria, you are only able to access more than 10% of your TTR pension each year at your age if you ceased work with no intention of returning to full time employment.
Hi
My preservation age is 60. Is there any way I can access any component of my super before 60 apart from financial hardship / compassionate grounds if I am not working. Can you do a Transition to Retirement/Pension if you are not working?
Thanks
Generally, no. The earliest that you can access any of your super apart from financial hardship / compassionate grounds, illness or injury is upon reaching your preservation age. See here for more info
Hi, I migrated to Australia in as a permanent 1993 and I worked in Australia for six years. After, 1999, as I started a business in India I kept shuttling between India and Australia till 2007 (my wife continued working and my daughter was studying). In 2007, all of us relocated to India and my Permanent Resident Visa has expired. I will be 58 years shortly. Can I withdraw my super.
I’m thinking you will need to meet the same conditions as all other Australians, but not 100% sure. For example, you will need to be either retired with no intention of returning to work, or you will need to end an employment arrangement after age 60, or reach age 65. You should check with your superannuation provider to see if any of your superannuation balance is ‘unrestricted non-preserved’. This portion may be accessible.
Hi
Just a small query. I turn 57 in September 2018 and i was wondering if i am able to access say $50000 from my super account. Total amt in super is $450000. I’m not looking at retiring till around 60yo. Purpose is to use this 50000 for a deposit on a house. My marriage ended in the end of 2013 and I’m looking at getting back into the housing market with my new partner. Just wondering what your thoughts are on this. Thanks
Hi Glenn
A person born in September 1961 meets their superannuation preservation age at 57. Superannuation Preservation age allows you to access if your superannuation in full only if you permanently retire from work. However, a transition to retirement (TTR) pension can be started while still working, after reaching your preservation age. A TTR Pension allows you to draw up to 10% of your account balance as an income stream each financial year. Depending on the tax components that make up your balance, there may be tax payable on withdrawals. You can get information on your tax components from your superannuation provider.
Hi Chris, I am 57 years old & born prior to 01/07/60, I am wanting to retire from workforce and move to Asia to live permanently where I may start a business. I will want to access my super to live and get established. My understanding is I can access approx $195K without tax implications, however I have had some TTR payments (3) so does this gross amount come off the $195K?
Hope you can help?
Hi Scott. A person under 60 meets a full superannuation condition of release if they retire after their superannuation preservation age and have no intention of returning to work (returning to work includes starting a business).
The $195,000 threshold applies to the taxable (taxed) component only. Tax free components are always received tax free and do not count towards the cap. Contact your super provider to understand the tax components that make up your balance.
I believe only commutations from an account based pension count towards the $195,000 cap – not ordinary pension payments.
Hi Chris, first of all thanks for providing a great site with a lot of up to date helpful information for the public. I have reached my preservation age (under 60) and am wanting to “retire” so that I can stop paying rent and finally have my own roof over my head and begin to save for the future, etc. I believe I meet the conditions for release of my super as a lump sum and intend to do this, however I know that in my heart I don’t want to stop working and will likely commence a new job in the short term after I ‘retire’. My questions is: is the retirement declaration simply for the purposes of convincing the super fund to release my super or might it have more serious consequences if any body (for example, the ATO) for whatever reason decided to look into my affairs down the track and investigate whether my intention to retire permanently was genuine at the time of my signing the declaration? Is there some ballpark time period that might be considered acceptable in terms of having been retired and then decided to rejoin the workforce again? I couldn’t sit at home for more than 4 weeks but am thinking this might be considered too short a period and that some agency might come after me and it could all come back to bite me. Any type of info you might provide would be greatly appreciated, I understand it is not legal advice but just wanting another opinion of someone who knows a lot more about this whole thing than me! Many thanks,
Hi Alison, apologies for the late reply. Accessing superannuation prior to meeting a condition of release is a serious offence. There is no one specific timeframe/action that defines your intention to retire. It is based on your circumstances at the time showing that you had every intention to permanently retire. I would not suggest trying to pull a swifty. However, if a person genuinely intends on permanently retiring and then has a change of heart and returns to work, then my understanding is that it’s okay. You should discuss your circumstances with an adviser or your superannuation provider.
Hi Chris I turned 55 on the 31st August 2017, and am divorced and work full time. I desperately need some dental work which is going to cost me around $20,000.00 and was told by a financial advisor that I can access 10% of my super. Is this information correct?
In short, no. A person born in August 1962 has a preservation age of 58 – see here https://www.ato.gov.au/Individuals/Super/Accessing-your-super/. Once you reach your preservation age you should have the ability to commence a transition to retirement income stream, which allows you to draw up to 10% of your balance each year as a pension payment. However, there may be tax consequences. You may be able to access some super now if any of your balance is ‘unrestricted non-preserved’. Contact your super provider to find out.
Hi Chris l’m 56 and l’m out of work at my age l find work notes to get. My financial situation is not good at the moment and l’m starting to get behind. Can l withdraw what l need to help and also can l use my super to self employ myself.
Hi Cheryl. You generally need to meet your preservation age before you can access your super. Click here to see your preservation age https://www.ato.gov.au/Individuals/Super/Accessing-your-super/. If you have reached your preservation age, you may be able to start a TTR pension. A TTR pension allows you to draw an income of up to 10% of your balance each financial year, but there may be tax payable.
I’m not sure what you mean by using your super to self-employ yourself, but I would say no, you cannot.
Hi Chris, I’m 57 and am currently doing a course which finishes late November 2017. I’m currently on Newstart allowance. I’m sure I will get work in this field more or less straight away. I am finding it hard to live on the allowance and want to withdraw $10,000 from my superfund to tide me over. Would this be possible? Would I be taxed and would it affect my government payments? Thanks in advance.
Hi Helen, you may be able to commence a TTR Pension allowing you to receive an income of up to 10% of your balance each year; however it would very likely reduce or eliminate your Newstart Allowance. Maybe not, but pretty sure it would, because currently your total superannuation is not assessed when calculating Centrelink entitlements. There may also be income tax consequences. Starting a pension would make the full amount assessable. You are only able to make a one-off lump sum withdrawal from super if you have retired with no intention of returning to work. I suggest contacting a financial planner or your superannuation fund to discuss your personal situation and options.
My wife is 65 permanently retired with no assets to speak of. No super balance etc . I am 60 just retired – while my super should not be counted in the assessment of age pension for my wife if I leave my super in accumulation stage -is it right that I can assess lump sums for living expenses and this lump sum not be included in my wife income test? I would not pay tax as being over 60 withdrawing would be tax free. However by leaving my super in accumulation stage would mean that the earnings would be taxed at 15% – is this right? If my wife gets a full pension, if eligible, until I reach age pension age at which time my super will be included in the asset test?
Hi Phil, this is all correct. However, I would be cautious of making regular lump sum withdrawals from super for the same amount each time. Centrelink may choose to assess consistent, regular withdrawals as income. Centrelink defines non-assessable lump sums (for income test) as a one-off payment from superannuation. See here https://www.humanservices.gov.au/individuals/enablers/lump-sums-while-income-support. I’m not saying consistent, regular lump sum withdrawals from a superannuation accumulation account would be assessable, I would just be careful.
Another thing. If you make a withdrawal and pay it into your personal bank account, but do not spend it right away, this will be counted towards the asset test and deemed to earn an income while sitting in your bank account.
Hi Chris. I will soon reach 60 and have well and truely reached preservation aged. I have been unemployed for a period of time and am in receipt of Newstart. I have a disability and have been assessed by Centrelink with a partial capacity to work 15 hours per week. Despite my best endeavours the chances of obtaining employment are slim. I believe that you must be permanently retired to withdraw your super. How does being on Newstart effect this as clearly you must have an intention to obtain work to be eligible for Newstart? I recall reading somewhere once that you could withdraw your super after preservation age if you had been on Newstart for a certain period of time and were experiencing financial difficulty. Are you able to enlighten me on this please? Thanks in anticipation.
Hi Vivien, this is one that is often filled with debate. The rule states that you have full and unlimited access to your superannuation if “an employment arrangement comes to an end after age 60”. Now, some people (including me) interpret this as you having to stop working in a certain position after being age 60 , and some people say you just need to be over age 60 and have ceased an employment arrangement – including still not working after age 60, despite ceasing the employment arrangement before age 60. I am not exactly sure of which interpretation is correct. Maybe it would be worth discussing your exact situation with your superannuation fund and ask if it meets the condition of “Retirement – an employment an arrangement coming to an end after age 60”. Personal financial advice should also be obtained, as accessing superannuation before meeting a condition of release has serious consequences.Some superannuation funds offer financial advice at a relatively small cost.
Failing that, you will, at the very least, be able to commence a transition to retirement (TTR) pension. A TTR Pension does not give you unlimited access to your superannuation, but will allow you to draw an income of up to 10% of your account balance each year. This pension income should be tax free over age 60.
Importantly, you should also be mindful of how accessing superannuation, or even having the ability to access superannuation, will impact your Newstart benefits.
I am 56 years old suffer chronic pain and no longer employable. I don’t have much super but I need to access it now.
You may be able to access some of your super under the permanent or temporary incapacity. Read here for information https://www.ato.gov.au/Super/Self-managed-super-funds/Paying-benefits/Conditions-of-release/#Permanentincapacity. You should contact your super fund to see your options for accessing any super benefits.
Hi Chris,
I was born 1959 and was wondering if I could access my super for a deposit on a house. I only have 33,000 but was hoping to use it if possible and can the banks or a broker help?
In order to have full access to your super, you need to be over your superannuation preservation age and retired, with no intention to return to work, or have an employment arrangement come to an end after reaching age 60, or turn age 65. Read more about superannuation retirement condition of releases here.
Hi Chris
looks like you are super guy in answering all these questions for people who need your help.
chris my preservation retirement age is 58. in july 2018 i will turn 55, currently i am no longer employed employed and will not return any kind of employment.
i have over 350k in my super account , 1 would like to withdraw the whole balance in July , on what amount will i be taxes and at whar rate. thank you
Haha, thanks Richard, I try to help with factual, non-personal advice where I can.
In order to have full access to your super you need to have reached your superannuation preservation age (58) and be retired with no intention of returning to work. Only people who have a preservation age of 55 can access their super at 55.
Hi Chris if I am injured at work six months ago and doctors say i cant work anymore and work has terminated my employment. there fore i do not intend to go back to work
i am total and permanently injured to to the nature of my injuries
bases on that can i withdraw my supper now and what tax do i have to pay and on what amounts.
thanks plz reply
Hi Richard, the level of access that you will have to your super will be determined by whether you are suffering from temporary or permanent incapacity. This link may be helpful https://www.ato.gov.au/Individuals/Super/Accessing-your-super/Early-access-to-your-super/#Temporaryincapacity
The tax that you pay on any withdrawals will be determined by your age and the tax components that make up your balance. Your tax components will include ‘tax-free’ and ‘taxable’. Tax free components can be received tax free and taxable components may incur tax depending on your age and the type of taxable component (taxed/untaxed) Click here for tax on the taxable component of super withdrawals.
It is best to contact your superannuation provider to find out the tax components that make up your balance and what access you may have based on your disability and then speak to a tax accountant about the tax implications of any withdrawals.
Hi Chris
I will turn 60 years old in Feb.2019 and would like to take a lump sum from my Super.I have not worked for a company that makes contributions for me for about 16 years will that count as retirement for withdrawing a lump sum of some of my super.I have worked for myself since that time. My Super company say i will not pay any tax after i turn 60 and there is no cap on how much i can take out.Thanks for your help. Mark
Hi Mark,
Firstly, contact your superannuation provider to see if you have any unrestricted non-preserved components. This portion of your balance should be fully accessible. If not, you can only make a lump sum withdrawal from your super if you: 1. Retire with no intention of returning to work 2. Have an employment arrangement come to an end AFTER reaching age 60 (both of these are definitions of retirement); or 3. Reach Age 65.
If you intend on continuing to work in your business and do not meet one of the aforementioned retirement definitions, you should still have the option of commencing a transition to retirement (TTR) income stream, which allows you to access up to 10% of your balance each year. Again, contact your super provider to see if they offer TTR income streams.
Hope that helps!
Hi Chris.
Hope your well.
Chris just a question.
I’m 55 and am finding it hard to repay my debts.
Is it possible to only withdraw $10,000 from my super. I have around $70,000.
Why do our super funds make it so hard for us..after all it is our money.
Also what tax would I need to pay.
Kind Regards
Helen
Hi Helen, I am well. Thank you for asking. I would prefer it to be a bit warmer though! Isn’t this meant to be Spring?
Before you have any access to your superannuation, you need to have met your superannuation preservation age. Based on your current age (55), I believe your preservation age will be 58 or 59. You can double check here. Once you reach that age, you are able to access up to 10% of your account balance each financial year – even if you are still working (via a TTR Pension), but some tax may be payable under age 60. If you have reached your superannuation preservation age and permanently retired, the access to your super is unlimited, but there still may be tax while under age 60.
So, in short, a person under their preservation age is generally unable to access their super. I am not sure of your situation, but you may be able to see if you would qualify under the hardship provisions.
Why is it so hard for us to access our money (super)? It’s actually not the super funds stopping us. It’s the government regulations stopping us. And there’s two reasons for it. Firstly, contributions that employers make into super (SGC) on behalf of employees are preserved until preservation age because the Government does not want people to spend all of their super and then rely on the Age Pension in retirement,as this would place too much pressure on tax payers.
Secondly, by investing in super, we get certain tax concessions as an incentive to save for retirement. The catch of these tax concessions is that we are unable to access our super until a certain age.
Bummer, I know!
Hope this information helps!
Hello Chris. I am 63 years old and would like to leave my job and withdraw 100 large or so to purchase a business. Any problems with that. I do not want to retire for a good while. Cheers,Max.
Hi Doddsy,
To make a lump sum withdrawal from super you need to meet one of the superannuation definitions of ‘retirement’.
One such definition is ‘having an employment arrangement come to an end after reaching age 60’.
So, being over age 60 and leaving your job would generally constitute meeting the definition of retirement and provide you with unrestricted access to the superannuation benefits you have accumulated up until that point.
Any subsequent contributions to super will be inaccessible until you meet another condition of release (e.g. ceasing another employment arrangement or reaching age 65).
Generally, over age 60, you will not pay tax on any super withdrawals (unless your balance includes a taxable (untaxed) component). Ask your super provider if this is the case.
As always, it is best to seek professional advice before accessing superannuation and making large lump sum withdrawals.
Best of luck with the business.
Chris
Hello Chris. I am 57 and have reached my preservation age and also permanently retired (with no intention of working further). My super is an ordinary SMSF (not an untaxed superfund) and i have no tax-free component. I have already used up all the lump sum low rate component last month. Can i now start an income stream and still receive the 15% tax rebate? Thank you.
Hi Gary,
One definition of retirement for superannuation purposes is reaching your preservation age and retired with no intention of returning to full-time or part-time work.
Satisfying this definition provides unrestricted access to superannuation savings via lump sum withdrawals or starting a retirement income stream (such as an account based pension).
All pension income received consisting of the taxable component is taxed at your marginal tax rate, less a tax offset equal to 15% of the taxable portion of the income.
Prior use of the lump sum low rate cap has no bearing on the taxation of super income stream payments and the 15% offset associated.
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Hi Chris, I have $90,000 super with First State Super but have recently started working for the Federal Govt again (on an ongoing contract – not permanent) and they inform me I have a preserved benefit with the PSS defined benefits scheme. I only have about $100 in there.
Is it worthwhile transferring my Super from FSS into PSS?
What are the benefits of being in a defined scheme – given I don’t really have any money in there. I am 50 years old and plan to work until 65 years (unless i win the lottery :-).
Kind Regards,
Lisa
Hi Lisa,
I am unable to provide personal advice unfortunately. I can only assist with factual information.
In general, a standard super accumulation account balance is invested and earns a return. The final balance upon retirement is based on contributions to the account and earnings within the account over the period. You can usually decide how you would like your super accumulation balance invested.
The final benefit of a defined benefit scheme is usually based on your final average salary, contribution rate and years of service.
You should probably ask your employer if the defined benefit scheme will be reactivated, or will future contributions be made to an accumulation account. I believe PSS offers both an accumulation account and defined benefit scheme and it is possible to have savings in both.
As a very general rule of thumb, it is usually more convenient to keep all of your super in one place. This will reduce the risk of paying double fees, be easier to manage and reduce the risk of losing track of your super.
However, there are many other factors to consider. Plus, if you close down a super account, any insurance held within that account might be lost. This is important to consider, especially if you need personal insurances and think it might be hard to obtain new cover based on health/age issues.
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Thanks for your reply, Chris. I appreciate your time. Cheers, Lisa
Hi Chris,
I have reached my preservation age 57, and want to access my super currently have only about 13,000 in super. I am casually employed and work an average of 1.9hrs a week. Do I need to retire from this job or can I continue, as it is under the 10hrs a week.
Thank you
Vicki.
Hi Vicki, in order to access your super under age 60, you need to have reached your preservation age and have no intention of returning to work on a full-time or part-time basis, ever again. Part-time is 10-30hrs.