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.
If you withdraw some of your super benefit before you reach 60, you will generally pay tax on your super savings (there are exceptions if you have a terminal illness, or the amount is a death benefit).
You can get your super when you retire and reach your 'preservation age' — between 55 and 60, depending on when you were born.
Generally, if you are aged 60 or over and eligible to access your super in full, all lump sum withdrawals will be received tax-free. If you are under age 60, you may be required to pay lump sum withdrawal tax, depending on the amount you withdraw and your superannuation tax components.
You may be able to take your superannuation as a lump sum payment when you retire. This is usually tax-free from age 60.
Your preservation age is the age you can access your super if you are retired (or start a transition to retirement income stream). If you were born before 1 July 1960 you have already reached your preservation age of 55 years. You can access your super once you have met a condition of release.
It's all about your age. If you were born before 1 July 1960 you can get access to your super when you turn 55. If you were born later the age varies between 55 and 60. People aged 65 or over can access super and work as well.
You can withdraw your super if you're. 65 years or over, whether you keep working or not. 60 or over and change employers or temporarily stop working. Under 60 and have permanently stopped working, and you've met your preservation age.
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.
Generally you can only access your super if you have reached your preservation age and meet a condition of release (such as retiring or turning 65). Your preservation age is between 55 and 60, depending on your date of birth.
How much super you'll need in retirement depends on the lifestyle you want. According to the government's MoneySmart website, if you own your home, the rule of thumb is that you'll need two-thirds (67%) of your current income each year to maintain the same standard of living.
When you reach the age of 55, you may be able to take your entire pension pot as one lump sum if you want. Whether you can do this and how you might do it will depend on the type of pension you have. But if you do, you could end up with a big tax bill, and risk running out of money in retirement.
There are very limited circumstances where you can legally access your super early. Eligibility requirements often relate to specific expenses. It is illegal to access your super for any reason other than when it is allowed by the superannuation law.
Tax on withdrawals of taxable component
Your marginal tax rate or 32%, whichever is lower – unless the sum of the untaxed elements of all super lump sum benefits received under the super plan exceeds the untaxed plan cap. Amounts above the cap will be taxed at the top marginal rate.
A lump sum withdrawal is a cash payment from your super to your bank account. You can request to withdraw a lump sum if you've met certain conditions set by the Government.
Technically, once retirement age is met or the transition to retirement is begun, an individual can withdraw from their superannuation to purchase anything they would like. However, if the requirements are not met, withdrawals from superannuation are illegal no matter what is being purchased.
You normally can't get your super until you reach your preservation age and retire. Preservation age is usually between 55 and 60, depending on your birth year. You can read about when you can withdraw and use your super on the Australian Taxation Office (ATO) website.
You can use super to pay off a loan, provided you are eligible to access your super. Whether you are using your super to pay off a home loan, investment loan, car loan or personal loan, there is no difference in your eligibility. In all instances you are required to first satisfy a superannuation condition of release.
Eligible applicants could be approved to withdraw up to $10,000 from their superannuation account. To be eligible, you'll need to: currently (and for the last 26 consecutive weeks) be receiving an income support payment from Centrelink or the Department of Veteran's Affairs (DVA)
As a general rule, most people will need 70% of their take home pay to maintain their lifestyle in retirement.
Assume, for example, you will need 65 per cent of your pre-retirement income, so if you earn $50,000 now, you might need $32,500 in retirement.
So looking at the table, you can see that a 60-year old male will need a lump sum of almost $500,000 to provide an annual income in retirement of $42,000 for 20 years. These calculations are based on a 20-year time frame because the approximate life expectancy for Australian males is 84 years and 88 for females.
If you retire with $500k in assets, the 4% rule says that you should be able to withdraw $20,000 per year for a 30-year (or longer) retirement. So, if you retire at 60, the money should ideally last through age 90. If 4% sounds too low to you, remember that you'll take an income that increases with inflation.