Retirement

When can I access my super?

You can access your super tax-free at the age of 60 and can choose to take it as a lump sum or pension, if you have satisfied a condition of release.

If you wish to access your super as a lump sum or commutable retirement income stream, you will need to be retired and of preservation age.  A commutable income stream gives you the flexibility to convert your income stream into a lump sum if you need to. Your preservation age depends on your date of birth.

Your date of birth

Your preservation age

Before July 1960

55

July 1960 to June 1961

56

July 1961to June 1962

57

July 1962 to June 1963

58

July 1963 to June 1964

59

After June 1964

60

If you are between 55 and 60 you can ease yourself into retirement under the Government’s Transition to Retirement rules. This way you can continue working full or part time while drawing an income from your super.

What age can I qualify for the age pension?

You will need to be 65 if you're male and between 60 and 65 (depending on when you were born) if you're female to access the aged pension. You will also need to satisfy the income and assets tests to qualify.

How do I convert my super into income when I retire?

Investing your superannuation into a retirement income product keeps your benefit in the super environment, so you pay no tax on investment earnings, capital gains or income payments if you're over 60 and have satisfied a condition of release. You may also qualify for additional Aged Pension entitlements and pay less tax on your investments outside superannuation.

You will need to be fully retired to convert your super benefit into a commutable retirement income stream. This gives you the flexibility to convert your income stream into a lump sum if you need to.

Retirement income options are divided into account-based and non-account based products.

  • Account-based pensions are available through superannuation funds while account-based annuities are available through life insurance companies. They pay regular income payments to cover your day-to-day living expenses while giving you the flexibility to make larger withdrawals when you need them. Your investment returns are determined by investment markets and are not guaranteed.
  • Non-account based pensions and annuities include lifetime, fixed term and life expectancy pensions and annuities. They pay a regular, guaranteed income over a set period of time, life expectancy or lifetime. These types of income streams are usually non-commutable, which means they can't be converted into a lump sum at a later date.
What is an account-based pension?

Account-based pensions give you control and flexibility over how you access your retirement income. They pay regular income payments to cover your day-to-day living expenses while giving you the flexibility to make larger withdrawals when you need them. Payments are generally made until your balance has been exhausted.

Investing your superannuation in an account-based pension keeps your benefit in the super environment, so you pay no tax on investment earnings or income payments if you're over 60 and have satisfied a condition of release. You may also qualify for additional Aged Pension entitlements and pay less tax on your investments outside superannuation.

How account-based pensions work:

  • You (or your dependants) receive regular income or lump sum payments until your capital runs out.
  • Minimum annual payment amounts apply and range from 4 per cent for people under 65 to 14 per cent for the those over ninety-five.
  • No maximum pension requirements apply.
  • Your pension or lump sum can be transferred to a dependant or your estate when you pass away.
What is a transition to retirement pension?

Under the Government's Transition to Retirement rules, you can ease yourself into retirement between the ages of 55 and 60 depending on your preservation age without sacrificing your income. These rules allow people to continue working full or part time while supplementing their income with an income stream from their super savings.

To benefit from the Transition to Retirement rules, you will need to rollover all or part of your super benefit into a non-commutable income stream. This means your income stream cannot be converted into a lump sum payment until you retire permanently, reach 65 or satisfy another condition.

You will need a sufficient super balance to cover pension payments. You can vary your income payments within government limits. The minimum starts at 4% each year of your account balance if aged between 55 to 64 and increases with age. You can only take up to 10% of your super account balance every year.

If you're over 60, your income payments will be completely tax-free. If you're under 60, your income stream may contain a tax-free component. The taxable component is taxed at your marginal tax rate. A 15% rebate may apply.