The superannuation rules for those over the age of 60 are the most favourable.
In this article, we will discuss superannuation contributions and withdrawals, as well as all the associated tax benefits.
In many cases, you should be able to access your superannuation tax free when over age 60. Click here to read more.
Superannuation Rules for Over 60’s – Contributions
Age 60- 64
The contribution rules for people between age 60 – 64 are the most flexible.
Non Concessional Contributions (After Tax Contributions) of up to $180,000 can be made within the financial year (2014-15). Further, you also have the ability to utilise the ‘bring forward rule’, allowing you to bring forward up to two years’ worth of the Non Concessional Contribution cap.
You can use the bring forward rule if you are 64 on 1 July of the year you turn 65.
| Year | NCC Cap | Bring Forward Rule Permitted? | Max NCC utilising Bring Forward Rule |
|---|---|---|---|
| 2014-15 | $180 000 | Yes | $540 000 |
Transitional provisions are in place in relation to the Bring Forward Rule from 1 July 2017 due to the reduction in the Non Concessional Contribution cap.
Concessional Contributions (SGC, Salary Sacrifice, Personal Deductible, Self Employed) of up to $35,000 can be made within the financial year (2014-15).
Age 65 – 75
Contribution rules for those over age 65 are a little more restrictive than being under age 65.
Again, Non Concessional Contributions of $180,000 can be made; however there is no ability to utilise the ‘bring forward rule’. Furthermore, you are required to meet the superannuation work test over the age of 65. This requires you to work at least 40 hours over a 30 consecutive day period within the financial year and prior to the contribution being made. Click here for more info on the work test.
Concessional Contributions can also be made up to $35,000 p.a., also requiring the work test to be met.
Only mandated employer contributions can be made for those over age 75.
Superannuation Rules for Over 60’s – Withdrawals
Tax on Withdrawals
Put simply, all lump sum and income paid from an account based pension for those over age 60 is received tax free, except for the Taxable (untaxed) component. Click here to read more about taxation of the Taxable component.
Accessing Super
Let’s start with the easy one. There is no restriction on accessing super for people over 65.
If you are between 60-65, you can generally have unlimited access to your super if you have ceased an employment arrangement over age 60 (even if you continue to work).
If you have reached your preservation age and have retired with no intention of returning to work, you also have unlimited access to your accumulated super.
In the final scenario, you are able to access your super if you are between 60-64 and are still working. However, in this instance, your access is limited to a transition to retirement (TTR) strategy. Click here for an example on how a TTR strategy works and the rules relating to a TTR strategy.
Click here to read how you may be able to access your super while under age 60 and still working.
Click here to read: ‘Superannuation Retirement Rules and Definitions‘
