Many people start using their super savings as soon as they retire and can access their super, but you don't have to. If you have other income sources or savings to live on, you could leave your savings in your super account. This means your money stays invested and could continue to benefit from investment returns.
It's perfectly okay to start making super contributions again if you retire but later change your mind and re-enter the workforce. That includes if you have made a written declaration to your super fund you intended to retire and have taken a lump sum super payout or are receiving ongoing payments from your super fund.
Leave the money in your super account (in the 'accumulation phase') until you need it. Take all or some of your super out as a lump sum. Move some or all of your super into an account-based pension. Move some or all of your super into an annuity (a regular income stream).
You can contribute to your super at any time up to age 74, even if you're not working. If you want to claim a tax deduction for your personal contributions you'll need to meet the work test, or work test exemption rules.
When your superannuation is in accumulation phase, you are not required to make any withdrawals from your account, even if you are retired. However, once you use some or all of your accumulation balance to start an account based pension, you must withdraw a minimum level of pension income each year.
You can only transfer your super to your bank account if you are eligible to access your super. To be eligible to access your super, you generally need to have at least met your superannuation preservation age.
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The taxable portion of the withdrawal will also be received tax-free up to the lifetime low rate cap, which is $230,000 for the 2022/23 financial year. However, any taxable component portion of a withdrawal above this lifetime cap will be taxed at 15%.
From 1 January 2023, the eligible age to make a downsizer contribution is 55 years of age and over. From 1 July 2022, it was 60 years of age or over, and prior to this, it was 65 years of age and over. All contributions can be accepted, except downsizer contributions.
Once you reach age 65, you can access your Super Benefit at any time whether you have retired or not. There are absolutely no restrictions to accessing your Super Benefit when over 65. Your Super Benefit can be accessed as either a Pension or Lump Sum withdrawal.
The ASFA Retirement Standard Explainer says a comfortable retirement lifestyle would need $640,000 in super for a couple, or $545,000 for a single person.
Pre-planning helps
ASFA estimates people who want a comfortable retirement need $640,000 for a couple, and $545,000 for a single person when they leave work, assuming they also receive a partial age pension from the federal government. For people who are happy to have a modest lifestyle, this figure is $70,000.
The safest place to put your retirement funds is in low-risk investments and savings options with guaranteed growth. Low-risk investments and savings options include fixed annuities, savings accounts, CDs, treasury securities, and money market accounts. Of these, fixed annuities usually provide the best interest rates.
If you can afford it, making extra contributions is a great way to boost your retirement savings. And it can reduce your tax. If you're on a low income, you may be eligible for extra contributions from the government.
Should I have my super in Cash? The Cash option has a very low risk level when measured over the short term. However, if you intend to stay invested in this option for a longer timeframe, you should consider whether the current low returns will be enough for your situation.
The most noteworthy benefit of investing in superannuation is its tax-effective environment. Contributions to your super fund are usually taxed at the rate of 15%, going up to 30% if the income and concessional contributions exceed $250,000 for a financial year.
There are absolutely no restrictions to accessing your Super Benefit when aged between 60 and 64 after you are retired. There are two ways you can access your Super; either as a lump-sum payment or as a pension.
If you own your own home, a rule of thumb is that you'll need two-thirds (67%) of your pre-retirement income to maintain the same standard of living in retirement.
If you're aged over 60, you can work part time and still access your super, provided the role is with a new employer, not the employer you left to meet your 'ceasing employment' condition of release.
An individual with more than $1.6 million in the retirement phase will need to either transfer the excess to an accumulation account where earnings will be taxed, or withdraw the excess from the superannuation system.
Depending on your fund's rules, you may be able to withdraw some or all of your superannuation (super) as a lump sum. If so, you can take all your super in one go, or as several lump sum payments. Ways of using a lump sum include: clearing debt (for example, paying off your mortgage)
Taking money out of superannuation doesn't affect payments from us. But what you do with the money may. For instance we'll count it in your income and assets tests if you either: use it to buy an income stream.
Your beneficiary could be: your spouse or partner. your children. interdependents (someone who lives with you and shares a close personal relationship where one or both of you provide financial and domestic support, and personal care of the other)
You can choose to access all or some of your super, subject to the rules of your fund. There are no legal restrictions on the amount you can access, but withdrawals must be taken as tax-free lump sums.