There are lots of rules when it comes to our super system. But not every rule applies to you at every age, so it’s worth figuring out which ones have an impact in your particular age group.
The rules at different ages govern how much and when you can contribute to super, when you can get your hands on your savings and how much tax you will pay. These rules are designed to ensure super is used for its intended purpose – for retirement income – in exchange for the generous tax benefits offered as part of Australia’s super system.
To make things a bit easier to understand, here’s SuperGuide’s simple explainer of the super rules applying in the final years before retirement.
Super rules if you’re in your 60s
Once you turn 60, the rules of the super system change. The key difference is that withdrawing money from your super is now free of tax if your savings are in a taxed super fund (the most common type).
Reaching age 65 is considered a condition of release, so you can withdraw your super benefit at this age without needing to actually retire.
Traditionally it hasn’t all been plain sailing in your 60s, as once you hit age 67 you needed to meet the requirements of the work test or work test exemption if you wanted to make many of the normal super contributions.
Fortunately, from 1 July 2022 the work test has been abolished if you want to make salary-sacrifice, spouse and non-concessional (after-tax) contributions into your account. But just to keep you on your toes, the work test (or work test exemption) remains in place if you’re aged between 67 and 75 and want to make a personal super contribution for which you intend to claim a tax deduction.
If you are aged 55 or older, you can also make a downsizer contribution into your super account of up to $300,000 from the total proceeds of selling your home.
The main rules applying to your super during your 60s are split between those covering:
- When money goes into your super account (contributions)
- When money comes out (withdrawing).
1. Contributing to super
Superannuation Guarantee (SG)
If you are aged over 60, your employer must still pay SG contributions on your behalf into your super account. The SG contribution rate is currently legislated to rise incrementally to 12% in July 2025.
If you meet the eligibility conditions, SG contributions are payable regardless of whether you are classed as working full time, part time or as a casual, or if you are a temporary resident.
If you are a contractor paid ‘wholly or principally for labour’, you may be considered an employee for super purposes and entitled to SG payments.
Your employer is not required to make SG contributions on your behalf if you don’t meet the SG eligibility conditions.
Super fund stapling
From 1 November 2021, if you start a new job you must inform your employer about which super fund you would like them to make regular SG contributions into on your behalf.
If you don’t advise your employer of your choice of super fund, they are required to check with the ATO to see if you have any existing super fund accounts into which they can make their SG contributions. This existing super fund account is called your stapled account, as it is linked to you and follows you as you change jobs.
Stapling is designed to stop new super accounts being opened every time you change employer, so you don’t end up paying multiple account fees. You are free to change your stapled account at any time by providing your employer with the details of your new super fund.
Contributions caps
Even though you are in your 60s, there are still annual limits or caps on the amount of money you and your employer can contribute into your super account.
From 1 July 2021, the annual general concessional (before-tax) contributions cap is $27,500 for everyone, regardless of their age.
Some people may have a higher annual concessional contributions cap for a particular year. From 1 July 2018, you can also make carry-forward concessional contributions if you qualify. Carry-forward contributions allow you to use any of your unused annual concessional contributions caps for up to five years to make a larger concessional contribution.
From 1 July 2021, the annual general non-concessional (after-tax) contributions cap is $110,000. Your personal non-concessional contributions cap may be different depending on how much you already have in super.
As you are aged under 75, you may also be able to contribute up to three years of your annual non-concessional contributions cap in a single year. Using the bring-forward rule, you may be able to contribute up to $330,000 ($110,000 x 3 years = $330,000) in a single year. The actual amount you can contribute depends on your current Total Superannuation Balance (TSB). (See bring-forward contributions section below.)
Work test
To make personal tax-deductible super contributions when you’re aged between 67 and 75, the ATO requires you to meet the work test for your contributions to be considered a valid tax deduction.
Under the conditions of the work test, you need to be ‘gainfully employed’ for at least 40 hours in 30 consecutive days during the financial year in which you wish to make your tax-deductible super contribution.
Bring-forward contributions
Giving your super a last-minute boost with a big contribution can be a smart move and you are now able to do that until you turn 75. (Technically you can do it until 28 days after the month in which you turn 75, by why wait until then?) Once you reach age 75, you’re not permitted to trigger a bring-forward arrangement.
Under the bring-forward rules, you may be able to contribute up to three years of your annual non-concessional contributions cap ($110,000 x 3 years = $330,000) in a single year. The actual amount you may be able to contribute using the bring-forward rule depends on your current Total Superannuation Balance (TSB).
Personal (or voluntary) tax-deductible super contributions
If you’re in your 60s and have some spare cash available, it may be worth considering making a personal voluntary contribution into your super account and claiming a tax deduction for it.
From age 60 to 66, you can make tax-deductible super contributions whatever your work status.
From age 67 onwards, however, you need to meet the work test requirement to be eligible to make this type of contribution and claim a tax deduction. (See work test section above.)
Downsizer contributions
As you’re older than age 55, you have the opportunity to make super contributions using the downsizer rules, which have no work test requirement or upper age limit.
Downsizer contributions allow you to contribute up to $300,000 ($600,000 for a couple) from the sale of your main residence to your super. These contributions are not counted towards your annual non-concessional contributions cap.
Self-managed super funds (SMSFs)
Many people approaching retirement think about establishing their own SMSF to take more control of their retirement savings and to pay themselves a regular super pension. However, it’s important to be aware SMSFs must adhere to lots of rules and you will have the ATO looking over your shoulder.
An SMSF can have no more than six members at any one time and no member can be an employee of another member unless they are related.
You can’t be a trustee of an SMSF if you have been convicted of an offence involving dishonest conduct, been subject to a civil penalty under super law, are insolvent or an undischarged bankrupt, or been disqualified from acting as a trustee of a super fund.
2. Withdrawing your super
Getting your money
Even though you have reached your preservation age if you are aged 60 to 64, you still need to meet a condition of release to access your super benefit.
Once you turn 65, however, the rules relax and you can withdraw your super without retiring if you wish, as being age 65 and over is a condition of release.
Paying tax on your super
Once you reach age 60, most people can take their super benefit free of tax (apart from members of untaxed super funds).
Taking a super pension
If you start a super pension, you must withdraw a minimum amount from your pension each financial year. This minimum amount is based on your age and is set by the government.
Transition-to-retirement pensions
For people in their 60s who are still working, it could be worth starting a transition-to-retirement (TTR) income stream as you move towards retirement. This type of super pension allows you to gradually draw on your super benefits while you’re still working.
After age 60, income from your TTR pension is tax free when drawn from a taxed fund.
When i make super contributions are they subject to 15% tax on entry to the fund
I am 62 years old
Hi Karen – Please see this article about how super contributions are taxed.
Best wishes
The SuperGuide team