Can I withdraw my super at 65 and keep working?
This is a common question.
Firstly, in order to access your superannuation, you need to meet a superannuation ‘Condition of Release‘.
There are a number of different ‘Conditions of Release’.
The mother of all Conditions of Release is reaching age 65. This is because turning age 65 provides you with full, unrestricted access to your superannuation savings regardless of whether you are still working or not. Most other Conditions of Release, while under age 65, are employment related.
Reaching age 65 provides greater flexibility in regards to accessing super and continuing to work, but there are some things you need to consider.
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Can I Withdraw My Super At 65 and Keep Working?
Withdrawing your super at 65 has no impact on your eligibility to continue working. Withdrawing your super after reaching age 65 does not require you to stop work.
One of the definitions of ‘Retirement‘ rules for superannuation access purposes is simply turning age 65. At this age, you are able to access all or some of your super as a pension income stream, withdraw it as a lump sum, or a combination of both.
And yes, you can continue working.
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Regardless of how you access your super (pension income stream/lump sum withdrawal) or how much your withdrawal, you are able to continue working, despite being over age 65. Even if you withdraw the whole lot!
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Can I Contribute To Super after Reaching Age 65?
Under the superannuation rules for people over 65, you are able to make or receive contributions into your superannuation account while you are still working.
If you are an employee, you will likely receive mandatory employer SG contributions at the going rate or, as a self-employed person, you may wish to make personal deductible contributions up until age 75. These are known as Concessional Contributions.
After-tax contributions are also permitted provided you are still working up until age 75. After-tax contributions are referred to as Non Concessional Contributions.
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To make or receive contributions over the age of 65, you will need to satisfy the superannuation work test (click here to read more).
However, you do not need to meet the work test in the first financial year after the financial year that you last met the work test, if you have a superannuation balance below $300,000.
Returning to Work After Accessing Superannuation
There you have it! You are able to return to work or continue working if you withdraw your super after age 65 under the superannuation retirement rules.
Tax on Super Withdrawals Over Age 65
All pension income and lump sum withdrawals are received completely tax free for anyone over age 60, provided it is sourced from the ‘tax-free‘ or ‘taxable (taxed)’ components of your superannuation balance.
Withdrawals from the ‘taxable (untaxed)’ component will be assessable for tax whether taken as an income stream or lump sum payment. You can find out the tax components of your superannuation account by speaking with your superannuation provider.
You can read more about lump sum withdrawals from super over 65 by clicking here.
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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I turn 65 in two weeks Can I submit withdrawal paper now or must I wait till my birthday
Hi Errol, I guess you are almost 65. Apologies for the late reply. Happy birthday (soon). This will depend on the processes of your super fund. You should contact them to see what they allow.
i m 66 on 29/09/2018. if i put money into my super fund is there a limit to how much i can withdraw. i have a part time job and part time self employed.
Hi Robert, as you have reached age 65, the amount you can withdraw from super is generally unrestricted, regardless of your employment status. This should be confirmed by your super provider.
Iam 69 and I work full time earning 52,000 per year my partner earns 9000 per year we get a small pension is there a limit to how much super I can with draw in a year with out affecting my pension ? Does it have to be below 80,000
Hi Alan, Centrelink apply an ‘income test‘ and an ‘assets test‘. Whichever test pays you the lowest Age Pension is the one that they apply. You first need to determine whether you are affected under the income test or assets test.
If you have not yet started a superannuation pension, the level of drawdowns you make should not affect your Age Pension. This is because a super pension balance is ‘deemed‘, so the ‘actual’ income is irrelevant. If you started a superannuation pension prior to 1 January 2015 you should read this. With all Centrelink matters, the final assessment done by Centrelink will determine your entitlements. If you like, you can call Centrelink to run a ‘what if’ scenario for you. They are usually quite helpful. I believe their pension number is 13 23 00 (just don’t call Monday mornings, you’ll be on hold forever!)
This is probably a stupid question but just want to know how anyone earning a combined income of 61,000 as per question above can be entitled to any pension at all, I obviously am looking at the wrong figures. I thought as a couple your combined pension is approx. $35,000 plus you can also earn $7800 per year (ie 300/fortnight). So how can one earn that money and still be entitled to anything.
Hi Susie, currently, a couple living together is able to earn up to $304 per fortnight under the income test and still be eligible for the full age pension. A couple is eligible to receive part Age Pension if they earn more than this, up to a maximum of $3,040.40 per fortnight, which is a reduction of Age Pension equating to 40 cents for each dollar over $304. Read here for more.
Hi Alan, another question. My husband is 66 and is thinking of taking half what he has in Super out and putting it in a safe but high interest bearing deposit. He plans to finish work completely in 12 months. How much worse off would he be compared to entering a TTR pension. I don’t work but collectively we would be under the assets test level so that we could receive an age pension I believe.
Hi again Susie!
Once over age 65, there is no need for a TTR Pension. A person over age 65 is eligible to commence an ordinary account based pension, due to age 65 being a full super condition of release – providing unrestricted access to super savings. A TTR pension is essentially a more restrictive account based pension and only useful for people under age 65.
An account based pension will be assessed identically for Centrelink purposes to a high interest bearing deposit owned in personal accounts.
You may even have the ability to invest in a high interest bearing deposit within an account based pension. Contact your super provider about this.
The benefit of an account based pension is that all earnings within the account are received completely tax free; whereas earnings in your personal name are assessed at your marginal tax rate and may incur tax, depending on your marginal tax rates.
But, to answer your question (I think), whether the money is kept within super/pension or withdrawn out and invested in your own name should not affect home much Age Pension you receive. It is assessed the same.
He may want to consider the estate planning of his super, compared to owning assets in your own name, as super assets are not distributed via the Will.
While I am sure such an event is decades away, I would suggest learning a bit more on Super Death Benefits Tax and Super Nominations.
Also consider fees paid within super, compared to fees in your own name.
A lot to take in, I know, but just trying to help you consider everything.
Remember, once super is withdrawn, it may be difficult to get back in over age 65 if you change your mind.
Hi Chris
I am 63 and am looking at withdrawing funds from my super to pay off all debt when I turn 65.
I intend to work past 65 till maybe 69.
Will withdrawing this lump sum from super impact on Centrelink pension
My wife does not work and she is 61
Hi John,
All super accumulation savings are exempt from Centrelink assessment until you reach your Age Pension Age.
Once you are over Age Pension age it is assessed in the same way as it would if you had it in your personal bank account.
If it was withdrawn and immediately used to pay off a home mortgage/non-investment debt it will generally not affect Centrelink payments. In fact, it could actually increase them if you are not already receiving the maximum. This is because your investment assets (in this case – super) is being reduced. Therefore, less assets are assessable.
If you are withdrawing super to pay off investment debt on, say, a rental property, it may affect your Centrelink pension if you make the withdrawal prior to reaching Age Pension age, due to the ‘equity’ in the property increasing.
Don’t hesitate to contact Centrelink on 13 23 00 (older Australian’s line) and ask them to perform a ‘what if’ scenario for you. That way they can input your proposed scenario for you and can tell you how it may affect your entitlements and are usually happy to do this for you.
Hope this helps,
Chris.
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Hi Chris,
I am 63 and my wife is 60, she has about $20k in super. She has no job and will not be getting one. Is she able to “retire” and access that super? I work full-time.
Hi Jim,
To have full access to super your wife needs to meet the superannuation definition of retirement. One definition of this includes reaching her superannuation preservation age with no intention of returning to work. Your employment status and age is irrelevant in determining her ability to access her super.
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Hi Chris,
I am 65 and have had to return to work afer taking early retirement.
My new job is full-time but only a temporary assignment of maybe 3 months and the employer will be paying the 9.5% super guarantee into an industry fund. Can I withdraw the super payments immediately and do I have to pay any tax on the withdrawal.
G’day Theo, age 65 is a superannuation condition of release. This means that you have unrestricted access to your super savings at any stage. Being over age 60 also means that the withdrawal of employer SG payments can be received tax free. Hope you’re enjoying the new gig.
Chris
Hi Chris
I am retired and 66 years old.
I am in an enviable position of just having been offered an opportunity to return to work with a past employer on a short contract basis (8 weeks) initially. Can I put all my “pay” into my super and then withdraw it to “minimise” tax?
Hi Peter,
An individiul’s wage is taxed at their marginal tax rate. Any amount salary sacrificed into super is not taxed at your marginal tax rate. However, it does incur superannuation contributions tax at the general rate of 15%. You can have a personal taxable income of up to $18,200 wihtout paying any tax due to the tax-free threshold. Therefore, you would generally only utilise the strategy you are proposing for income above that amount. Otherwise, why would you salary sacrifice wages into super and pay 15% contributions tax, when you can receive the income tax free anyway? You should also take into account the Low Income Superannuation Contribution, which effectively reduces contributions tax. For someone in your position, it may be worth obtaining advice from a financial planner, as there are a number of ways you can reduce tax inside and outside super while over 65 and still working.
Hope this helps,
Chris
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I am old enough to take my super, but am still working part time, and have my super in two different funds. Can I move my balance from one fund into a retirement account, and start receiving a pension from it, and at the same time continue to leave my other fund in accumulation phase? Does all my super have to be in either pension phase or accumulation phase, or can I split it if I have my super in two separate funds?
Hi Stephen,
Yes, you can leave all or some of your super balance in accumulation phase and, yes, your super can be held in different accounts with different providers.
Be mindful of any insurances held within a super accumulation account that might be cancelled if you close the account.
If you are under age 65, be sure that you have met a superannuation condition of release to access your super.
Hope this helps.
Regards,
Chris
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Hi Stephen, I will be 65 this year and was wondering if I took enough money out of my superfund once I turn 65 to pay out my home morgage and continue working, will I pay tax on what I withdraw from superfund? Secondly would I be entitled to a old age pension when I do decide to retire and would I get full pension with health card? Thirdly am I able to continue paying into my supa for just death insurance once I am on old age pension? Sorry for all the questions, thanks
Hi Sally, generally withdrawals from superannuation over age 60 are tax free, even if you are still working. However, you should confirm that your super balance doesn’t include a ‘taxable (untaxed)’ component. If it does, part of the withdrawal may be taxable. Your eligibility for Age Pension payments will be determined by your level of income and assets, as assessed by the Centrelink Income test and Assets test. You can usually retain life insurances within super after age 65, but you may need to meet the superannuation work test to make contributions to cover the premiums. Also, be mindful not to completely close down any super accounts that hold insurance, otherwise you may be cancelling any insurances within the account. Consider leaving a small balance in the account.
Regards,
Chris
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