On this page
- Why add to your super after retiring?
- If I retire, when can I access my super?
- How does retiring affect my ability to make more super contributions?
- Contributions you can make as a retiree (by age)
- What if I return to work after retiring?
- Boosting your super after returning to work: What contributions can I make?
- How do I restart making super contributions?
Retiring today is not like the old days when you left a job and never looked back. In fact, the latest available data from the Australian Bureau of Statistics (ABS) shows 31.4% of full-time and 12% of part-time working Aussies over the age of 45 don’t know whether they intend to retire.
These days, some people even decide to head back into the workforce after a few years in retirement. This could be due to lost income during the pandemic, or just finding they don’t have enough saved to enjoy the retirement they planned.
But retirement can have an important impact on your super, so you need to be aware of the rules applying to your specific circumstances.
Why add to your super after retiring?
Contributing to your super account after you’ve retired can be a rational decision as super savings are generally taxed at a lower rate than normal income outside the super system.
And if you draw an income stream from your super account, it may even be tax free, so continuing to save through super can make sound financial sense.
If I retire, when can I access my super?
You can retire from the workforce at any age you want. But when it comes to withdrawing some or all your super benefits, generally the earliest you can access your money is when you reach your preservation age AND formally retire.
The preservation age for Australians born before 1 July 1960 is 55 years, while anyone born on or after this date has a preservation age of between 56 and 60.
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 your preservation age and decide to access your super benefits, you need to make a written declaration to your super fund that you have a genuine intention to retire. This means you plan to leave the workforce permanently and don’t expect to work more than 10 hours per week again.
How does retiring affect my ability to make more super contributions?
Employment has always been closely linked to saving for retirement in Australia’s super system so, until recently, being employed was one of the key eligibility criteria for making super contributions.
In the past, with one or two exceptions, if you weren’t working you were generally ineligible to make super contributions. This is the reason the work test and work test exemption were so important for many people still wanting to make super contributions in their late 60s.
Once you made a written declaration to your super fund that you were officially retired, your ability to make further contributions into your super account was much more limited.
Until 30 June 2022, if you were aged between 67 and 75, you needed to meet a work test if you wanted to make a personal super contribution. Following passage of the Treasury Laws Amendment (Enhancing Superannuation Outcomes for Australians and Helping Australian Business Invest) Act 2022, this requirement has been abolished for most types of super contribution.
You still need to meet the work test, however, if you want to make personal tax-deductible super contributions.
Contributions you can make as a retiree (by age)
From 1 July 2022, if you are not working and are:
1. Aged under 75*
You can make:
- Non-concessional (after-tax) contributions (and commence a bring-forward arrangement)
- Spouse contributions (your receiving spouse must be under age 75)
- Downsizer contributions (from age 55 – see section below)
To make non-concessional or spouse contributions you must have a Total Super Balance (TSB) of less than $1.7 million on 30 June of the financial year before the one in which you want to make your contribution.
*Your contribution must be received by your super fund within 28 days after the end of the month in which you turn age 75.
2. Aged 75 or older
Your permitted types of super contributions are:
- Spouse contributions (your receiving spouse must be under age 75)
- Downsizer contribution
What if I return to work after retiring?
Just because you’ve retired, doesn’t mean you’ll stay there. Transitioning to retirement is no longer a one-way street, with many retirees now deciding they want to re-enter the workforce at a later date.
It’s perfectly okay to start making super contributions again if you retire but later change your mind and re-enter the workforce.
That includes if you have made a written declaration to your super fund you intended to retire and have taken a lump sum super payout or are receiving ongoing payments from your super fund.
An easy way to start making super contributions is to open a new accumulation account with your old super fund for your super contributions.
If you have made a retirement declaration to your super fund, you will need to show your personal circumstances have changed and you are required to return to work. While you should not make a false declaration, if you retire and then change your mind and return to work, this is fine and you will be permitted to make super contributions again.
If you ceased working after age 60 and triggered a condition of release for your super, you can access your super benefits without needing to declare your retirement, so there are no issues with you returning to work and then restarting your contributions.
If you are returning to the workforce after retirement and plan to restart making super contributions, it’s sensible to get in touch with your super fund to discuss your new situation.
It’s also worth noting that you could be required to prove to the ATO or APRA that your intention to retire was genuine and you did not take your super benefits while planning to return to work in the future.
Boosting your super after returning to work: What contributions can I make?
If you return to work after being retired, the rules for contributing into your super account are the same as for anyone else and they mainly depend on your age and TSB.
Currently, if you have returned to the workforce and are:
1. Aged under 75*
Your permitted super contributions include:
- SG, industrial award or arrangement and salary-sacrifice contributions
- Personal non-concessional (after-tax) contributions
- Spouse contributions (your receiving spouse must be under age 75)
- Downsizer contributions (from age 55 commencing 1 January 2023)
- Personal contributions for which you intend to claim a tax deduction (see details below for work test requirement)
*Your contribution must be received by your super fund within 28 days after the end of the month in which you turn age 75.
2. Aged 75 and over
Your permitted contributions include:
- SG, industrial award or arrangement contributions
- Spouse contributions (your receiving spouse must be under age 75)
- Downsizer contributions
How do I restart making super contributions?
If you return to work after retiring and want to make some extra contributions to your super account, there are no rules about how much you can contribute (aside from the normal annual contribution caps) or how much you need to earn to contribute.
Once you return to work, your employer must make concessional SG contributions on your behalf into your super account, regardless of how much you are earning or how many hours you work for them.
If you or your new employer start making fresh contributions into your super account when you return to work, it’s a good idea to contact your super fund to explain your changed situation. If you closed your super fund account on retirement and took a lump sum, you are generally free to open a new super account with a super fund of your choice.
Vanessa Toose says
Can I make a downsizer contribution to super age 76 or over? Is there any age limit for downsizer deposits if I’m selling my permanent place of residence which has been owned by me for 10+ years? Can I start a new super account for such deposit at that age if I don’t have one already? (I’d want to convert it into an income stream shortly after deposit.)
SuperGuide says
Hi Vanessa – Sorry for the delay in responding. Yes, you can make a downsizer contribution at age 76 or over. This type of contribution is available to anyone aged 55 or more, with no upper age limit.
The limit is $300,000 per person and contributions must not exceed the settlement price of the home.
You may start a new super account to contribute to if required.
You can learn more about downsizer contributions here.
Best wishes
The SuperGuide team
Mark Bailey says
If I receive a redundancy payment can I use those tax paid proceeds to contribute to my super account whilst it is still in accumulation mode.
Secondly can I also add to my super if I change the super fund from accumulation mode to an account based pension mode?
SuperGuide says
Thank you for your questions Mark
Contributions made into super with after tax money are called Non-Concessional Contributions (NCC). Provided you are eligible to make them, you should be able to utilise your personal after-tax money to make an NCC. Please refer to this article for more details.
In terms of adding to your super after commencing an account-based pension, you may be eligible to do that if you meet certain requirements. First of all, to commence an account-based pension, you should have met a condition of release. More information in this article.
In most instances, if you are under 75, you can make super contributions even after commencing an account-based pension. You cannot add to the same account-based pension and so will have to maintain an accumulation account to do so. You can refer to this article for more details.
Please note that the above articles provide general information only. You should consult a financial adviser or speak with your superannuation provider to get more information.
Thank you.
The SuperGuide team