You can withdraw your super: when you turn 65 (even if you haven't retired) when you reach preservation age and retire, or. under the transition to retirement rules, while continuing to work.
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.
Each year you can withdraw as much as you like through your account-based super income stream (unless you're receiving a transition to retirement income stream). You must withdraw a minimum amount each year – based on your age and account balance.
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.
There are no rules about what you can spend your super on if you choose to take it as a lump sum.
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%.
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.
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.
If you're 60 and still working, you can access a limited amount of your super balance by starting a transition to retirement income stream. A TRIS is an account-based income stream that can't be converted into a lump sum and allows you to access between 4 and 10 per cent of your super balance.
Super rules generally state that you can't withdraw your super until you reach a certain age and retire, unless you happen to be taking some of it out under the First Home Super Saver Scheme, which aims to help eligible Australians save for a deposit on their first home.
There is no maximum amount which must be paid unless it is a transition to retirement pension. A maximum amount of 10% of your account balance applies for transition to retirement pensions which are not in retirement phase.
If you are aged 60 or over any withdrawals from a taxed accumulation super fund are generally tax-free. Speak to a financial adviser to find out the best way to take your super since taking all of your super on retirement as a lump sum may not be a good idea.
Withdrawing a lump sum
Instead, your investment earnings outside super are taxed at your marginal tax rate, which can be as high as 45% (plus the Medicare levy).
A Lump Sum Gives You More Control of Your Assets
By accepting a lump sum from the pension, you gain the control over your income assets. Even if the income generated from the lump sum is less than the promised annuity payment from the pension, you gain control over the assets.
One frequently used rule of thumb for retirement spending is known as the 4% rule. It's relatively simple: You add up all of your investments, and withdraw 4% of that total during your first year of retirement.
Some common retirement mistakes are not creating a financial plan and not contributing to your 401(k) or another retirement plan. In addition, many people take their Social Security distributions too early, don't rebalance their portfolios to match risk tolerance, and spend beyond their means.
Once you have an estimate of your annual retirement spending, you can begin to work out how much you need overall by multiplying your annual spending by the number of years you expect to spend in retirement, figuring in an extra 3% per year for inflation.
You may be able to take your superannuation as a lump sum payment when you retire. This is usually tax-free from age 60.
Eligibility. You can apply for one payment of up to $10,000 gross in a 12-month period if: you haven't received a financial hardship payment from any superannuation fund within the last 12 months. you've received eligible Commonwealth income support payments for a continuous period of at least 26 weeks.
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.
There are absolutely no restrictions to accessing your Super Benefit when aged between 60 and 64 after you are retired.