Superannuation might sound boring, but when you think of your super fund as a shiny pot of money just waiting to be spent, being forced to save for retirement suddenly isn’t such a drag. But if you were able access your super whenever you wanted, that would defeat the purpose of it.
While there are special circumstances when you can get some or all of your super earlier, like financial hardship or other misfortunes, as a general rule, you can’t withdraw money from your super fund until you reach what is known as your preservation age.
Your preservation age will be between 55 and 60, depending on when you were born. As the below table shows, the preservation age is being gradually increased to 60 for those born after June 30, 1960.
Superannuation preservation ages:
Before July 1, 1960 : 55
July 1, 1960-June 30, 1961: 56
July 1, 1961- June 30, 1962: 57
July 1, 1962- June 30, 1963 : 58
July 1, 1963-June 30, 1964: 59
From July 1, 1964: 60
But don’t start spending your money just yet. Reaching your preservation age is just one of the requirements…
If you want to access your super from preservation to 60…
If you’re still working between your preservation age and 60, you can’t take your super as a lump sum. You can only start what’s known as a non-commutable income stream – a regular pension that will supplement your income.
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Also known as a transition to retirement (TTR) pension, this is often used by people wanting to supplement their wages while easing out of the workforce by cutting back their hours or moving to casual employment.
If you stop work between your preservation age and 60, you may be able to get unlimited access to your super, provided you pass a genuine retirement test. This means you have to have terminated your employment and have no intention of going back to work for more than 10 hours a week. If you’re just changing jobs, or staying at your existing job and cutting back to one day a week, you won’t be regarded as having genuinely retired.
If you want to access your super aged 60-65…
Once you turn 60, it’s a lot simpler. All super benefits are tax free from 60 whether you take them as a lump sum or a pension.
However, you still need to qualify for access by ceasing gainful employment. This can be as simple as changing jobs or, where you are both a director and employee of a company, resigning as an employee. You no longer have to show that you intend to retire.
If you want to access your super aged 65+…
Turning 65 is in itself a condition of release, which means once you’ve blown out the birthday candles you can access your super at any time regardless of whether you’re working.
You can take all or part of your super as a lump sum or pension, or a mix of both.
However you choose to access your super, you’ll need to contact your super fund and fill out the appropriate forms. Most super funds now offer their own pensions that you can roll your super into, but you may benefit from seeking financial advice.
Your super has been built up over many years for this moment, so it’s worth taking making sure you’re getting the most from it.
