How Much Can I Withdraw From Super Tax Free?

A little birdie tells me that you want to withdraw your super, but you don’t want to pay any tax for the privilege!

Well, you’ve come to the right place my friend! We’re going to have a look at how much of your super you are able to withdraw tax free.

How Much Can I Withdraw From Super Tax Free?

The amount you can withdraw from super tax free is determined by your age and whether you wish to withdraw your super as an income stream or a lump sum.

Furthermore, your balance will include one or more of the following tax components:

  • Tax-Free
  • Taxable (taxed)
  • Taxable (untaxed)

All withdrawals from super, whether as an income stream or lump sum, must be made proportionately from each tax component based on the ratio of your balance at the time of withdrawal.

Aged 65 or Over: Lump Sum

If you are over age 65 you can withdraw as much of your super as you like as a lump sum. And, because you are over age 60, the withdrawal will usually be received completely tax free.

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The only time tax may be payable is if your super balance includes a taxable (untaxed) component. It is not common, but you should ask your super provider if your balance includes this component.

Aged 65 or Over: Account Based Pension

If you are over age 65 you can withdraw as much of your superannuation account based pension balance as you like in any one year, subject to the minimum pension income requirement. And, because you are over age 60, the withdrawal will usually be received completely tax free.

The only time tax may be payable is if your pension balance includes a taxable (untaxed) component. It is not common, but you should ask your pension provider if your balance includes this component.

Aged 60-64: Lump Sum

If you are aged between 60 and 64 and have met a full superannuation condition of release, you can access as much of super as you like as a lump sum. Being over age 60, there will be no tax payable, unless your balance includes a taxable (untaxed) component.

If you have not yet met a superannuation condition of release, lump sum withdrawals are generally not permitted.

Aged 60-64:Account Based / TTR Pension

If you are aged 60-64 and have met a full superannuation condition of release and are accessing your super via an account based pension, then the amount of pension income you can withdraw is limited only by your account balance. There is no maximum limit on the pension income you can receive in any one year. Being over age 60, all pension income will be received tax free (unless your balance includes a taxable (untaxed) component).

If you are aged 60-64, but have not yet met a full condition of release, then access to your super will be limited to a transition to retirement pension. A transition to retirement pension allows you to access up to a maximum of 10% of your pension balance each financial year. Being over age 60, all pension payments will be received tax free.

Therefore, in this instance, the maximum you can withdraw from your super tax free will be 10% of your TTR pension balance each year.

Preservation Age to Age 59: Lump Sum

If you are aged between your preservation age, but under age 60 and have met a full superannuation condition of release, you can access as much of super as you like as a lump sum. Being over your preservation age, but under age 60, the tax-free component of your withdrawal will be received tax free and the taxable (taxed) portion will be received tax free up to the lifetime low rate cap, with any excess being taxed at 15%. The taxable (untaxed) component portion will be taxed at 15% up to the lifetime low rate cap; 30% up to the untaxed plan cap and 45% for any amount above.

If you have not yet met a full superannuation condition of release, you are not permitted to make a lump sum withdrawal at all.

Preservation Age to Age 59: Account Based / TTR Pension

If you are aged between your preservation age, but under age 60 and have met a full superannuation condition of release, you can withdraw as much as you like as a pension payment from your account based pension. The tax-free component portion of the income stream will be received tax free; the taxable (taxed) portion will be taxed, together with all other forms of taxable income, at your individual tax rate, minus a 15% tax offset. The taxable (untaxed) portion will be taxed at your individual tax rate.

If you have not yet met a full superannuation condition of release, you are limited to accessing your super via a transition to retirement pension, which means you can access a maximum of 10% of your account balance each financial year. Being over your preservation age, but under age 60, the income received will be taxed in the same manner as an account based pension, as discussed in the paragraph above.

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Thanks for stopping by - Chris

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