Superannuation Rules for Over 65




  1. Graham holland

    I have 700,000 in super retirement with australian super.presently i draw $609.00 a fortnight but this is less tha the mininium wage.
    Can i increase tis amount and what is your recommended amount.

    • Chris Strano

      Hi Graham
      For the purposes of answering your question, I will assume that you mean you have $700,000 in an account based pension retirement income stream. If so, you are required to draw a minimum income each year, based on the account balance on 1 July of each year and your age. For example, had your balance been $700,000 on 1 July 2017, you are required to draw a minimum income for the financial year of 4% ($28,000) if you are under age 65 or 5% ($35,000) between ages 65-74. This percentage increases as your age increases. Click here if you are over age 74. Based on this, it appears that your $609 per fortnight will not meet your minimum requirements and your superannuation provider will need to make a top-up payment prior to the end of the financial year (30 June).

      As far as a ‘recommended amount’ goes, this is completely up to you and your needs. There is no recommended amount. Keep in mind though that account based pensions will only continue to provide you with an income until the account balance reaches $0. The longevity of an account based pension is determined by the earnings within the account and the level of drawdowns you make. By only drawing the minimum income requirement, you can increase the lifespan of the pension.
      Hope this helps.

  2. Robin Thomson

    I am 65 and still working. If I withdraw a portion of my existing super in a lump some does it have to be declared as taxable income in that years return?

  3. Ric

    Hi Robin,
    My uncle is 73 and retired. He has sold his house & is downsizing into a unit. Is he able to make a lump sum payment to super from the sale proceeds? He does not meet the work test criteria.

  4. May

    Dear Chris
    My husband has had an accumulated super with the commonwealth govt. He left them nearly 30 years ago and had to leave it there until he turns 65 (reaching retirement age). He will be 65 in a few days and they did not contact him about taking his money out. Today we downloaded a member statement for 30th June 2018 and found out in the statement “PLEASE NOTE: You must claim your preserved benefit by your 65th birthday.” Situation is we are living overseas as my husband is still working. We understand that he will have to take his super out soon. We have an SMSF in Australia, but do not think we can roll over this money into that – very strict rules about contributing into an SMSF while living overseas. My husband also has a rollover super amount (from another employer) with ColonialFirstState. Do you know if we can roll the Commonwealth super into CFS? Or, is our only option is to take the lump sum and put it into a bank account etc? What is the tax consequences for taking the lump sum? Hubby’s money is all preserved benefits. Many thanks for any answer.

    • Chris Strano

      Hi May,
      Thank you for your question.
      Commonwealth Govt pensions can be confusing schemes with specific rules. Without knowing details it is difficult to provide an accurate answer.
      However, one thing to consider is this. ‘Rolling over’ super is different to ‘contributing’ to super. Rolling over super is simply transferring from one super account to another, while contributing is making or receiving contributions from outside of super into super. Click here to read more about residency rules.
      In any case, I would strongly suggest obtaining professional advice regarding this to ensure you are not disadvantaged or make decisions that cause your SMSF to become non-complying.
      My gut tells me that you should be able to rollover to the SMSF or to CFS, but don’t do anything until you seek advice, as it may impact his final benefit amount.
      Consider all your options before taking a lump sum, because once it’s out of super it might not be able to be put back in – especially for people over 65. There may also be tax implications in taking a lump sum.
      Happy birthday to your husband!

  5. Claire

    My super fund recently merged with another super fund. The new super fund has told me that since I am 65 they have changed my investment strategy with 90% now in the Retirement Pool and 10% to the Cash Pool. I still want to have a higher risk portfolio. Is their rule legislated? If not, I’m considering changing super funds.

    • Chris Strano

      Hi Claire,
      I’m only guessing here, but I assume the super fund has done this as a duty of care to you based on your age. They have chosen this as a default option on your behalf.
      Depending on your super fund, they might allow you to switch to a higher risk option – most super funds allow this.
      I would suggest contacting them and asking.

  6. Michele

    Hello Chris – I am 63 and my husband is 67. We are both working part time but intend to fully retire at the end of 2017. We have a SMSF worth $1.2M comprising local and overseas shares, property trusts, fixed interest and cash returning dividends of approximately $50K a year. We are paying $15K a year to maintain the SMSF (management fees, tax return and auditing costs).
    My question is – once we are both fully retired would it be better to close the SMSF and maintain the investments outside super to reduce management fees?

    • Chris Strano

      Hi Michele,

      Thanks for your question.

      I am unable to provide you with personal advice, but I will give you some things to consider:

      1. As people approach retirement, they generally try to contribute as much as possible to super. There is a reason for this.
      2. If you were to withdraw all of your retirement savings from your SMSF into your personal name, what would you do with it? How would it be invested? And what would that cost compared to what you are paying now?
      3. When you retire, and presumably commence retirement income streams with your super, all income and capital gains are received completely tax free. Whereas all income and capital gains in your personal name are taxed at your individual tax rate.
      4. If your only concern is the cost of the SMSF, there are much cheaper superannuation options available, ranging from approx. 0.15% – 1% of your balance. You do not have to have a SMSF; however, a SMSF provides greater flexibility in relation to investment options, estate planning and administration – but it comes at a cost. In saying that, it is possible to maintain a SMSF for less than $15,000 p.a.

      Click here for a non-exhaustive list of superannuation funds.

      Think very carefully before taking your money out of super. It is difficult to get large amounts into super, especially over age 65.

      Hope this helps!

      p.s. I have an upcoming webinar series helping people work through types of questions exactly like yours. Let me know if you would like me to add your email to the updates list.

  7. Steve

    Hi Chris

    I turn 65 December 2018 I am selling my principle residence in March 2019 how much from the sale can I put into my super.I have $280.000 in my super and do not work.

    • Chris Strano

      Hi Steve,

      The new home downsizing provisions allow for up to $300,000 per couple from home sale proceeds to be contributed to super if the home was owned for at least 10 years. This will not count towards any super contribution caps. However, if the home sale contract was signed prior to 1 July 2018, you will not be eligible to contribute the proceeds under this measure.

      The contribution must be made within 90 days of receiving the proceeds.

      While over age 65, standard concessional or non-concessional contributions cannot be made without meeting the superannuation work test. However, from 1 July 2019, retirees aged 65-74 with balances below $300,000 will be exempt from the work test in their first year of retirement (i.e. the first financial year that the work test was not met). This could open up the standard contribution caps if you retired in the current financial year.
      Related Articles:
      How Much Can I Contribute to Super in a Lump Sum?

  8. Rodica Popp

    Hi Chris,

    First of all many thanks for all these very useful articles you have online – they really clarified a lot of issues for me in a few days of reading.

    I am 65 and my TTR pension changed to a Flexi pension in the amount of $475,000. I am still full time working and contribute the $25k before tax to the accumulation account currently in the amount of $95k. I am going to receive an inheritance in the amount of $70k which I’m thinking to deposit as after tax contribution to the super account.
    Considering the tax benefit on the flexi pension earnings I would like to transfer most of my current accumulation account into a flexi pension account. My question is how can I merge the 2 flexi pension accounts in one and how many times can I do that , in case I will have other accumulation money (at least 25k) to start another flexi pension account. Do I need to transfer the flexi pension amount ($475k) into the accumulation account and then create a new flexi pension account? Can I do this a few times? Is there any issues I should pay attention to while doing this?

    Many thanks and much appreciated.

    • Chris Strano

      Hi Rodica, thank you for the kind feedback.
      (For the purpose of answering your question. I will assume your flexi pension is an account based pension. Different providers have different names.)
      To merge your super into one pension account, it involves rolling your account based pension back into the accumulation account to combine it with your accumulation savings and then commence a new account based pension with the total amount. You can do this as many times as you like.
      The main thing to consider would be any transaction costs. For example, if your account based pension portfolio needs to be sold down before being transferred to accumulation phase, there may be transaction costs in selling and repurchasing investments. This will depend on your super provider’s process.
      When making an after tax contribution, it may be more beneficial to keep these after-tax contributions (tax-free component) separate by commencing a second pension with only the tax-free components. It does add complexity, but could reduce future tax by keeping taxable and tax-free components separate.
      Hope this helps,
      Related Posts
      [ SUPERGUY YOUTUBE] Accumulation vs Pension Phase
      Commutation of Account Based Pension
      Superannuation Tax-Free Component

      • Rodica

        Thanks Chris for the very good suggestions given above.

        I have reached 65 in august this year and as I didn’t make any after tax contributions in the previous 3 years I would like to trigger the bring forward rule for a recontribution strategy. Please confirm that I can do that as I was under 65 for more than a month in this financial year.
        My Flexi Pension I believe is all/mostly taxable as I only had employer and before tax/salary sacrifice contributions (taxed 15%). I’d like to increase the tax free component by withdrawing 300k from my flexi pension and recontribute it to my accumulation 2 account as I am still working full time in tertiary education.
        However as the Flexi Pension is 475k and accumulation is 95k how can I separate the tax-free component and start a second pension with only tax-free component.
        Many thanks,

        • Chris Strano

          Hi Rodica,
          The ATO states that, in order to utilise the brign forward rule, you need to be 64 years or younger on 1 July of the financial year that you would like to utilise the bring-forward rule. The amount you can bring forward is calculated by the difference between the transfer balance cap and your total superannuation balance. If your total super balance is less than $1.4M, then your bring-forward period is 3 years. If your balance is between $1.4M-$1.5M it is 2 years and if it is above $1.5M you are unable to utilise the bring forward rule.

          An accumulation account and each pension account you have are considered separate superannuation interests. Tax components within each superannuation interest are segregated from tax components within other superannuation interests. Think about how this would apply if you had a pension account and then made a $300k non-concessional contribution to an accumulation account and used this to commence a second pension.

          You seem to have a reasonable understanding of some of the rules. Please be mindful that there are typically several other rules you needs to be aware of when implementing superannuation strategies. This is particularly when you are dealing in significant sums representing a large chunk of your retirement savings. I strongly suggest obtaining personal financial advice. I would expect there to be further benefits in doing so.

          Kind regards,


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