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    When can I access my super?

    Posted by Northadvisory on January 19, 2021

    Senior man looking at documents on the deskOver your working life you have been growing your retirement nest egg. Your superannuation is there to help support you in retirement and, ideally, provide you with the funds to enjoy a comfortable lifestyle during your golden years.

    Your ability to access your super is generally based on your age, but there are certain conditions that need to be met to make sure you don’t end up on the wrong side of the ATO.

    There are definitely tax benefits when your super moves into retirement phase – no tax on your income payments and no tax on your earnings; however, there are still regulations around how you access it.

    Australian currencySuperannuation conditions of release

    The ATO outlines Australian super laws that have very specific conditions of release for superannuation. These are…

    “You can access your super when you:

    • reach your preservation age and retire
    • reach your preservation age and choose to begin a transition to retirement income stream while you are still working
    • are 65 years old (even if you have not retired).

    You can also access super in some special circumstances, including:

    • compassionate grounds
    • severe financial hardships
    • terminal medical condition
    • temporary incapacity
    • permanent incapacity
    • super less than $200
    • temporary resident departing Australia.”

    Separate to these conditions, there may be governing rules relevant to your super provider that could have additional restrictions that impact the payment of your super benefits. If you are unsure, we recommend speaking with your provider to confirm this information.

    Preservation age

    As noted above, meeting your preservation age is the most common first step to accessing your superannuation. And your preservation age is determined by when you were born.

     

    Date of birth Preservation age
    Before 1 July 1960 55
    1 July 1960 – 30 June 1961 56
    1 July 1961 – 30 June 1962 57
    1 July 1962 – 30 June 1963 58
    1 July 1963 – 30 June 1964 59
    From 1 July 1964 60

     

    Once you reach your preservation age, the way you choose to utilise your super depends on your employment status. For example, if you turned 58 in 2020, you will have reached preservation age, and you could commence your account-based pension upon retirement.

    Alternatively, if you didn’t want to retire, you could consider starting a transition income stream, where you utilise your preserved funds to boost your income, if you have reduced your working hours. Although, you don’t necessarily have to reduce your hours to access the transition income, there just might be tax implications depending on your age.

    Woman working in florist shopTransition to retirement

    The transition to retirement income stream (TRIS) enables you to receive regular payments from your super while you continue working. Ideally, you would not start this income until you have turned 60, because if you are below that age, tax is payable on investment earnings.

    The ATO has guidelines on how much can be accessed via this pension:

    “There are restrictions on the amount you can withdraw each financial year. For example, if you are under 65 years old, you can access between 4–10% of the balance of money in your super account each financial year.

    Once you have met a condition of release with a nil cashing restriction, you can access your super benefits in other ways and don’t need a TRIS. In these cases, your provider will start paying you a normal account-based pension or you can take your benefit as a lump sum.”

    It can be difficult to determine whether a TRIS would suit your personal circumstances. If you are unsure, it can be useful to seek professional financial advice.

    Saving Australian Money in a jar for retirementDo I have to access my super?

    There is no strict law that says that have to access your super once you meet the conditions of release. Depending on your personal financial situation, you may decide that you want to keep working, or that you simply do not need to access your super just yet.

    There are always options available to you. Instead of starting an income stream, you could decide to withdraw some of it as a lump sum. This way, a significant amount of your super could be left untouched and continue to earn interest and investment returns.

    Speak to your advisor

    We understand that superannuation can be complex… that’s where we can help. We can assess your circumstances and determine how to make the most out of your super. Plus, we can make sure you meet all the necessary conditions of release. To find out more, contact our team today.

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