Retiring at 60? Your super simple guide to 12 common questions

For many people planning their retirement, age 60 sounds like a good time to leave the workforce.

If that’s your plan, it’s important to ensure you understand the rules on accessing your super, how big your nest egg needs to be, the tax you might pay and any financial assistance you may be able to receive.

To help you take the leap into life after work, SuperGuide has put together a simple guide answering common questions asked by people who plan to retire at 60.

1. When can I access my super savings?

Once you reach age 60, it’s fairly straightforward to access your super benefits if you are retired from the workforce, as that is a condition of release.

In the super world, to access your super benefits at age 60 you must:

Have reached your preservation age
Have ceased gainful employment
Not have any intention of becoming gainfully employed again.

For more detailed information, read SuperGuide article Accessing super: Ceasing employment after 60.

If you withdraw your super benefits once you reach 60, most people pay no tax on their retirement savings. This is a big change from withdrawing before age 60, where tax is payable on some parts of your super benefit (see later in this article).

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Remember, if you retire at 60 and withdraw your super savings, you miss out on the benefits of compound interest. This can have a significant impact on how much income you have in later years.

For more information, read SuperGuide articles:

Super tip

If you are currently receiving payments from Centrelink, check before you access your super benefit. It may affect your entitlement to a benefit and the amount you receive, as many government benefits are based your taxable income (e.g. Family tax benefit Part A and B, Child Care Subsidy, government co-contribution and the seniors and pensioners tax offset).

To find out more, contact Centrelink on 13 23 00 or check the Centrelink website.

For more information, read SuperGuide articles:

2. Can I access my super at 60 and still work?

One of the main conditions of release for accessing your super benefits at age 60 is ceasing employment.

In most cases, that means it’s not possible to access your super at age 60 and continue working with the employer you left to meet the condition of release.

You can, however, get another full or part-time job with a new employer. Or if you have two jobs, you only need to cease one employment arrangement and you can continue in your other job.

To access your super benefits at age 60, you will need to make a written declaration to your super fund you have a ‘genuine intention to retire’. This means you plan to leave the workforce permanently and don’t expect to work again more than ten hours per week.

You can also start a transition-to-retirement income stream (TTRs or TRISs) with your super benefits while you’re continue working. For more about TTRs, see the section later in this article.

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3. Can I still make contributions into my super if I retire at 60?

Once you cease gainful employment, the contributions you can make into your account are much more limited and depend on your age:

Aged 64 and under, you can only make non-concessional (after-tax) contributions into your super account up to the annual contribution cap ($100,000 in 2020/21).
Aged 65 and over, you can only make downsizer contributions (up to $300,000 in 2020/21).

For more information, see the following SuperGuide articles:

4. What are the options for withdrawing my super benefit?

When you withdraw your super savings at retirement, you can choose to take either a lump sum or an income stream:

Income stream (super pension or annuity) – If you decide to take a super income stream, you will receive a series of regular payments from your super fund. These must be paid at least annually and must meet minimum annual payment rules.
Lump sum – This is a single payment that withdraws some or all of your super. If you take a lump sum the money is no longer within the super system and if you invest it, any return received on the money will not be taxed as super savings. This means the concessional tax rate of 15% on your super account’s investment earnings will no longer apply. Instead, your investment returns will be taxed at your marginal tax rate, which could be as high as 45% (plus the Medicare levy).

Need to know

When choosing whether to take a lump sum or income stream from your super account, consider getting professional advice from an independent financial adviser or tax professional. Tax and super are very complicated and taking a lump sum may not necessarily be the best strategy for you, as there can be tax advantages with a retirement income stream.

5. What are the tax implications of retiring at age 60?

Super withdrawals after age 60 are generally tax free.

If you are aged 60 or over and decide to take a lump sum, all your lump sum benefits are tax free.

If you are aged 60 or over and decide to take a super pension, all your pension payments are tax free UNLESS you are a member of a small number of defined benefit super funds, or you receive a defined benefit pension over a certain limit. In these two situations, you will pay some tax on your super pension, but this generally only affects public servants.

These two exceptions only affect people who choose to take a super pension AND are:

Members of an untaxed super scheme (usually a public sector fund)
Receiving a private or public defined benefit pension of more than $100,000 a year (in 2020/21).

For a detailed explanation of how super benefits are taxed if you retire under age 60, read SuperGuide article Your tax guide to accessing your super under age 60.

6. What is the average super account balance at age 60?

According to Association of Superannuation Funds of Australia research[i], in 2016/17 (the latest available data) the average super account balance for males aged 60 to 64 was $336,360, while for females the average was a bit lower at $277,880.

Unsurprisingly, the average balance for those on higher incomes tends to be higher. In 2016/17, the average super balance for a male aged 60 to 64 in the $180,000 plus tax bracket was $1,224,954. For females in the same tax bracket, the average was $1,323,120.

For Aussies aged 60 to 64 in the $37,001 to $87,000 tax bracket, the averages were $280,468 for males and $268,910 for females.

Average and median super account balance 2016/17

	Average super account balance	*Median super account balance**
Males (age 60–64)	$336,360	$154,453
Females (age 60–64)	$277,880	$122,848

7. What is my life expectancy at age 60?

Life expectancy is a statistical measure that estimates how long a typical person of a specific age and sex is likely to live. It’s based on your year of birth and gender, but does not consider your circumstances, such as your personal health, family history, diet or lifestyle.

That means it’s an estimate of how long a typical person is likely to live, not a prediction of how long you will live.

The estimates below are an average life expectancy for someone age 60 based on national statistics, without taking into account any personal factors such as your health or family history.

Estimated life expectancy at age 60

	Expected remaining years of life	Life expectancy
Male	24 years and 0 months	84 years and 0 months
Female	26 years and 11 months	86 years and 11 months

Need to know

If you are working out how much you will need in your nest egg if you retire at 60, it’s important to remember the average life expectancy figures are only an average. That means half of all Australian retirees will not reach their life expectancy, but half will live more years than this projection. Typically, two-thirds of people die within eight years either side of the average life expectancy.

For more information read the following SuperGuide articles:

8. Can I get the Age Pension if I retire at 60?

To be eligible for the Age Pension, you must have reached the current Age Pension eligibility age, which is 66 years for anyone born between 1 January 1954 and 30 June 1955.

Age Pension ages from 1 July 2019 are listed in the table:

Date of birth	Age Pension eligibility age	Date that Age Pension age changes
Born between 1 January 1954 and 30 June 1955	66 years	1 July 2019
Born between 1 July 1955 and 31 December 1956	66 years and 6 months	1 July 2021
Born from 1 January 1957 onwards	67 years	1 July 2023

Source: Department of Social Services

In addition to the age requirement, whether you are eligible for an Age Pension depends on you being able to:

For more information see the following SuperGuide articles:

9. Can I get a health card if I retire at 60?

If you retire at age 60, unfortunately you are ineligible for the Commonwealth Seniors Health Card (CSHC). This concession card gives you access to cheaper health care, medications and, potentially, government services.

To qualify for a CSHC, you must have reached your Age Pension eligibility age, which depends on your date of birth (see table above). This is progressively being increased to age 67 from 1 July 2023.

For more information, read SuperGuide articles:

10. Can I get a state Seniors Card if I retire at 60?

Congratulations, if you retire at age 60 you are eligible for a state Seniors Card in most states and territories.

The eligibility rules for a Seniors Card are different in each state and territory (and they change regularly), but the general rule is you need to be aged at least 60 to apply for a state Seniors Card. Residency and work test rules also apply.

It’s worth noting many states allow you to apply for your card up to three months before you turn 60.

Briefly, the requirements in each state and territory in relation to your age are:

State	Eligible age for Seniors Card
Australian Capital Territory	62 or over (From July 2020 eligibility age will be lowered to 60)
NSW	60 or over
Northern Territory	60 or over
Queensland	60 or over with government concession card
Tasmania	60 or over
Victoria	60 or over
Western Australia	63 or over

Note: Residency and work test rules also apply when you apply for a Seniors Card.

For more detailed information on Seniors Card eligibility and benefits, read SuperGuide article Your simple guide to state Seniors Cards: How they can save you money.

11. Can I start a transition to retirement income stream at 60?

A transition to retirement (TTR or TRIS) is a pension income stream from your super account that you draw down on while you are still working. It can be a way to scale back your working hours and start enjoying your transition into retirement.

Starting a TTR can also allow you to salary sacrifice into super to save tax, while using your TTR to supplement your salary so you can maintain your lifestyle.

You are eligible to start a TTR if you have reached your preservation age, are still working and are a member of an accumulation super fund (90% of Australians are in these funds.)

For more information, read SuperGuide article Guide to transition to retirement pensions (TTRs or TRISs).

Need to know

Since 1 July 2017, the investment returns on the assets underlying a TTR pension are taxed at 15%, just as they are in a super accumulation account. Previously these investment returns were tax free.

For more information, read SuperGuide article Did tax kill the transition to retirement magic pudding?

12. How much super do I need to retire at 60?

When you retire at 60, you could be spending 25 or 30 years in retirement, so you’ll need to create a retirement income stream that lasts a long time.

If you retire at age 60, the amount of super you will need to fund your retirement income depends on many factors.

For more information, read SuperGuide article How much super do I need to retire?

To help you get started working out how much super you need if you retire at 60, we have put together tables for both couples and singles using figures generated from ASIC’s MoneySmart retirement planner calculator.

There are six different scenarios showing the income generated from different super balances ranging from $500,000 at retirement through to $3.2 million (combined for a couple).

If you want to calculate the income using your own circumstances, try SuperGuide’s Super to income reckoner, which has nearly 9,000 options you can use.

Scenario 1: Income generated from a $500,000 retirement super balance transferred into a super pension account