Accessing super after retirement: what, when and how?
What you need to know about accessing your superannuation
If you’re getting close to retirement age, you’re probably thinking about that superannuation you’ve got saved up. After all, you’ve spent a lifetime saving for it! You should think about accessing your super a few years before you intend to retire, as there are a few rules around how and when you can withdraw the funds.
When can I access my super?
You can access your super when you are permanently retired and have reached your ‘preservation’ age. This age differs depending on the year you were born.
You can also withdraw your super when you turn 65, even if you haven’t retired yet.
How can I access my super?
If you meet all the conditions and want to access your super, you need to decide on how you want to access the money. You can receive your super as a super income stream, a super lump sum or a combination of both, although you will need to check with your fund to see what options are available to you.
A super income stream is a popular choice because it can help you manage your spending. You receive regular payments (at least annually) over an identifiable period and the amount must meet the minimum annual payments for super income streams.
Alternatively, you can set up a super lump sum, which means you can withdraw all or part of your payment in one go. If you choose this option, the money you withdraw is no longer considered as super. Any investments you make with the money will be taxed and may need to be declared in your tax return.
What if I have reached preservation age but am not permanently retired?
If you have reached preservation age, are still working in some capacity and want to access some of your super, you could consider setting up a transition to retirement strategy (TTR). This could help you supplement your income if you have reduced your hours.
A TTR is when you transfer some of your super into an account-based pension. This can provide tax benefits as if you’re 60 or older, your pension is tax free. However, it could impact you or your partner’s government benefits, so it’s important to get some advice to make sure it’s the right solution for you.
Are there any ways of accessing superannuation early?
There are some circumstances where you can access your super before you reach preservation age. These include:
- Incapacity – if a medical condition means you can’t work or need to work fewer hours.
- Severe financial hardship – if you can’t meet your living expenses and have been receiving government benefits for 26 weeks.
- Compassionate grounds – to pay for unpaid expenses such as medical treatment or to modify your home because of a severe disability.
- Terminal medical condition – if you have a terminal illness or injury.
Can I leave my money in super after I retire?
You don’t have to access your superannuation funds when you reach retirement age if you don’t need to. If you have enough income to live on or you expect to work again, you may prefer to leave your super in the accumulation phase.
However, your tax implications will differ depending on your age and your circumstances, so it’s important to talk to your superannuation fund to find out the most effective solution for you.
Where can I go for more information?
You can read more about accessing super on the Australian Tax Office or on the Money Smart website. If you’d like to understand more about how to access your superannuation, it’s important to get advice personalised to you and your situation. You could talk to:
- Your superannuation fund
- Australian Government’s Financial Information Service
- Your accountant or financial adviser
If you’d like to know more about how we can help you plan for retirement, get in touch with us at Five Good Friends.