Your nest egg: can you get part of your super early? 95



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Thinking about withdrawing part of your super, but confused about the rules? Rest assured, you are not the first! Below is a quick outline on the rules on when you’re allowed to get your hands on your retirement nest-egg.

In most cases, you must reach your ‘preservation age’ to get your hands on your super. The following table provides your preservation age based on your date of birth.

Date of birth – preservation age

Before 1 July 1960 – 55
1 July 1960 – 30 June 1961 – 56
1 July 1961 – 30 June 1962 – 57
1 July 1962 – 30 June 1963 – 58
1 July 1963 – 30 June 1964 – 59
From 1 July 1964 – 60

Once you reach preservation age and you have retired, you have the green light to access your super.

For example:

Jacqui is 56 and was born on January 13th, 1958. She has just retired from the workforce and doesn’t intend to work again. She can withdraw from her super, subject to any tax considerations.

If you are still working, then you may only have limited access to your funds. By limited, I mean you may be able to access your super in the form of an income stream, rather than a lump sum payment. The technical name for this is a Transition to Retirement pension where you can receive regular payments from your super while you continue working. You can access up to 10% of your super account balance each financial year.

An example of this is John who has a super balance at July 1st of $300,000. He can start a Transition to Retirement pension and receive up to $30,000 in pension payments for that financial year.

Once you celebrate your 65th birthday, you have the all-clear to access your super with no restrictions. You can take it as a lump sum if you want to pay off something big like your mortgage or you can take it as a regular payment or pension.


How is your super taxed?

It depends on your circumstances, although in simple terms if you’re aged 60 or over, any withdrawals from a taxed super fund are completely tax-free. If you have an untaxed fund such as a government super fund, different rates may apply.

If you are aged between 55 and 60 years, there may be tax to pay on withdrawals. However, you can normally withdraw a lump sum of up to $180,000, tax-free.

A full breakdown on the tax rules can be found at the Australian Taxation Office website.

It is always a good idea to get some professional advice before making any withdrawals from your super. This will help you make an informed choice and make sure there are no hidden nasties such as tax or penalties to consider.

Information provided in this article is general in nature and does not constitute financial advice. Before making any decision based on this information, you should assess your own circumstances or seek advice from a financial adviser. Wally David is an Authorised Representative (318432) of Wealth Managers Pty Ltd, AFSL No. 232701. 

Are you considering accessing funds from your super? If so, what do you plan to do with the money?

Wally David

Wally David is a Certified Financial Planner® with over a decade of experience in the field of financial planning. He is the founder of and regularly appears in the media to comment for news stories, TV segments and other forums.

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