When can I access my superannuation?

Super accessibility is a topic that gets brought up often and some of the rules have changed around this. In this blog post I am only going to focus on some age based and retirement conditions of release. Noting there are other potential ways of accessing your super such as illness and compassionate grounds with their own sets of rules.

Being age 65

At the moment with the current rules set by the ATO – the current age regardless of if you are working or not is 65 where you can access your superannuation in full. This includes being able to withdraw it in full or at this point you also have access to an “account based pension/income stream”. A big benefit of these income streams are that all earnings from the fund in an account based pension are tax exempt. It is important to seek advice in this area as there are some potential detriments to these pensions for example if you are planning to receive JobSeeker from age 65 to your Age Pension age at 67, Centrelink will assess the value of your income stream (or if you withdraw your super – they will assess this also).

Retirement at preservation age

Another way of being able to access your superannuation is ceasing a gainful employment arrangement, retiring and never intend to be gainfully employed again for more than 10 hours per week – this can be done once you have met your preservation age and prior to age 65 (as you can access your super anyway at 65). What is my preservation age? Well it did use to be a moving target and from anyone born from the 1st of July 1960 it was 55, then it increased each year thereafter. However now we have reached the maximum set increases and as at 1st of July 2024 – essentially anyone who is 60 is now “preservation age” – unless rules change in the future….

Transition to retirement (TTR)

TTR – there are a lot of people that get confused about this condition of release, although it doesn’t give you access to your full superannuation, you are eligible to commence an income stream and withdrawing a minimum of 4% and a maximum of 10% of the balance annually. Noting if you have some superannuation benefits that are defined benefits for example, commencing this early can have an impact on your final value.

What I mean by people getting confused, some think that you need to reduce your working hours to access this – you can if you want, however as long as you are over preservation age, irrespective of your work situation, you can access a TTR income stream. These can be beneficial in a number of ways such as assisting with any outstanding mortgage repayments prior to full retirement or freeing up cash flow for other wealth building strategies.

Ceasing employment over 60

Being over 60 does open up other opportunities for another condition of release where you can access superannuation, which is simply being age over 60 and ceasing a gainful employment arrangement. This will allow you to access superannuation you have accumulated to that point in time. You don’t need to declare retirement (for the retirement condition of release noted above). However if you go back to work for a new employer next week, any new superannuation you earn is now “preserved” until another condition of release is met.

Summary

It is important to seek advice in this area as there are a lot of complexities and you can get on the ATO’s bad side quickly if the rules are broken. Some people ask me for example “what if I reduce my working hours to 10 hours per week with the same employer”. On face value it seems it is meeting the retirement definition I have mentioned above, but there is an important component it misses which is the cessation of an employment arrangement, whereas it is more just a reduction in employment.

If you have any questions – please feel free to reach out, the ATO website here expands on some of the points I have mentioned also.