Accessing super: Reaching age 65

Turning 65 is an event worth celebrating, but even more so where your super is concerned. That’s the day you can access your super in Australia, even if you continue working. It is the most straightforward condition of release.

How do you apply for your super benefits when you reach 65?

You should contact your super fund. They can send you the appropriate forms, and you will also need to provide proof that you have reached 65.

You can access your super as a lump sum, an income stream (also known as a superannuation pension) or a combination of both.

Can I access super at 65 and keep working?

Yes. You can access your super when you turn 65 regardless of whether you’re still working.

You can also make certain types of super contributions up until you turn 75, even if you’re retired and drawing a super pension. However, if you are aged between 67 and 75 and want to make a personal super contribution for which you plan to claim a tax deduction, you must pass the work test. That is, you must work a minimum of 40 hours in any consecutive period of 30 days.

Do I have to access my super when I turn 65?

In most cases, no. You can leave your super in your fund until a later date (or even until you die) if you want.

The exception to the rule is that members of some defined benefit super funds may be required to access their super at age 65, depending on their circumstances.

According to independent financial adviser Philip Harvey of Construct Wealth, if you are no longer employed by the agency that made contributions to your defined benefit fund and you preserved your super in that fund, then you may need to claim your benefit by age 65. This could be as a super pension, lump sum or a combination of the two.

Alternatively, he says you could roll over your preserved benefits to another super fund. Or start taking a pension from your defined benefit fund and contribute any surplus income to another super fund.   

It’s also worth noting that it is compulsory for super funds (including SMSFs) to pay member benefits to their beneficiaries when a member dies.

What are the tax implications?

If you’re in a taxed super fund (the most common type) lump sum and income stream withdrawals from super are tax free for anyone over the age of 60.

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If you have untaxed components in your super, the situation is more complex.

Other conditions of release

Besides reaching the age of 65, other common superannuation conditions of release are:

• Retiring from the workforce after you’ve reached your preservation age. Your preservation age is between the ages of 55 and 60, depending on your date of birth
• Stopping work once you’ve reached the age of 60, even if you get another job
• Reaching your preservation age and beginning a transition-to-retirement income stream (TTR or TRIS)

You can also access part (or all) of your super prior to reaching your preservation age in special circumstances, such as:

• If you become permanently or temporarily incapacitated
• If you’re suffering severe financial hardship or from a terminal medical condition
• On compassionate grounds.

The bottom line

Accessing your super is a big financial decision. You should seek independent financial advice to help you determine the most appropriate financial strategies for your individual circumstances.

The information contained in this article is general in nature.