You don't pay tax if you withdraw up to the 'low rate cap', currently $235,000. If you withdraw an amount above the low rate cap, you pay 17% tax (including the Medicare levy) or your marginal tax rate, whichever is lower.
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.
When you turn 60, your pension payments (or any lump sum withdrawals) are usually tax free. All lump sums and pension payments are tax-free after age 60. If you're under age 60, tax may be applicable.
A lump sum payment is taxable in the year you receive it but is for an earlier income year. Eligible payments usually relate to: employment. compensation.
Super is a great way to save money for your retirement. It is generally taxed at a lower rate than your regular income. You typically pay 15% tax on your super contributions, and your withdrawals are tax-free if you're 60 or older.
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.
You can access your super, without restrictions, even if you're still working. Rules for accessing your super: You can access your super as long as you've permanently retired. If you end an employment arrangement on or after age 60, you can also access the super you've earned up until then.
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.
If you withdraw money from your super fund, you must tell Centrelink within 14 days.
If your super provider allows it, you may be able to withdraw some or all of your super in a single payment. This payment is called a lump sum. You may be able to withdraw your super in several lump sums. However, if you ask your provider to make regular payments from your super it may be an income stream.
Can I Transfer My Super to My Bank Account? 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.
Yes. You can access your super when you turn 65 regardless of whether you're still working.
While you're under Age Pension age
We don't count you or your partner's superannuation in the income and assets tests, if your fund isn't paying you a superannuation pension. If your fund is paying you a superannuation pension, it is assessable as an income stream.
If you're 60 and over, the income will generally be tax-free. If you're between your preservation age and 59, the components of your super will dictate how it will be taxed.
On 28 February 2023, the Australian Government announced from 1 July 2025 a 30% concessional tax rate will be applied to future earnings for superannuation balances above $3 million.
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.
Overall, retiring at 60 is doable with $500,000 but it may not be doable for you. It really depends on your personal living situation and what your potential expenses are going to be.
You may be able to take your superannuation as a lump sum payment when you retire. This is usually tax-free from age 60.
Even if you have super, you may still qualify for at least a part age pension from the government. Even though Australians have had compulsory super since 1992, many may qualify for — and may need to rely on — an age pension to some degree in retirement.
The minimum amount that can be withdrawn is $1,000 and the maximum amount is $10,000. If your super balance is less than $1,000 you can withdraw up to your remaining balance after tax. You can only make one withdrawal in any 12-month period.
The Bottom Line. For some, a lump-sum pension payment makes sense. For others, having less to upfront capital is better. In either case, pension payments should be used responsibility with the mindset of having these resources support you throughout your retirement.
If you are aged between 60 and 64 your Super Benefit is preserved until your "Retirement". There are absolutely no restrictions to accessing your Super Benefit when aged between 60 and 64 after you are "Retired". In this case your Super Benefit can be accessed as either a Pension or Lump Sum withdrawal.
For people from their preservation age to 59
No tax is payable on the tax-free component of your income stream payment. The taxed component however is added to your taxable income and taxed at your marginal tax rate, less a tax offset equal to 15% of the taxable portion of the payment.