Planning to retire at 60? What you need to consider

If you want to want to access your super savings and are age 60 or older, you have three options:

• Resign from your employer (even your second job) after you turn age 60. You are then permitted to access all your super that has accumulated to that date, even if you are still working in another job or you plan to return to work.
• If you left work before turning age 60, you can access your super if you declare that you never intend to return to the workforce for 10 hours a week or more.
• If you have never worked, you cannot leave the workforce as you were never employed, so you will need to wait until you turn 65 to access your super. The super regulations require you to have ended “an arrangement under which you were gainfully employed” to access your super account prior to age 65.

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 the rules mean tax is payable on some parts of your super benefit (see Question 5).

Do keep in mind though, if you retire at 60 and withdraw your super, you miss out on the benefits of compound interest and the tax benefits available if you were to leave your savings within the super system for longer. This can have a significant impact on how much income you have in later years.

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

One of the main conditions of release allowing you to access your super benefits at age 60 is ceasing employment. In most cases, this means it’s not possible to access your super and continue working with the same 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 10 hours per week.

You can also start a transition-to-retirement income stream (TTR or TRIS) with your super benefits while you continue working (see Question 11).

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

Yes.

Under the contribution rules applying from 1 July 2022, if you are:

• Aged under 75, you are free to make most types of contributions (such as non-concessional contributions, salary-sacrifice and downsizer contributions) into your super account without having to worry about being employed and meeting the requirements of a work test.

The only exception to this is tax-deductible super contributions. From 1 July 2022, once you reach age 67 you must be ‘gainfully employed’ for at least 40 hours in a period of 30 consecutive days during the financial year in which you wish to make your tax-deductible super contribution.

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

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

• 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 the minimum annual payment rules set by the government.

• 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 investment returns 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).

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

Super withdrawals after age 60 are generally free of any tax.

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 $106,250 a year (2022–23).

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

According to ATO figures, in the 2020-21 financial (the latest available data), the median super account balance for males aged 60 to 64 was $211,996, while for females the median was 25% lower at $158,806.

Note that this is the median account balance, which is slightly different to the average. The median is the middle account balance of an age group – 50% of the age group will have a higher balance and 50% will have a lower balance.

7. What is my life expectancy at age 60?

Life expectancy is a statistical measure estimating 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.

This means it’s a population 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 an Australian male and female aged 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

Source: 2015–17 Australian Life Tables, Australian Government Actuary. The Australian Life Tables are released every five years, with the next report with updated life expectancy figures to be released in 2024.

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 from 1 July 2023 is 67 years.

In addition to the age requirement, whether you are eligible for an Age Pension depends on you being able to satisfy the Age Pension assets test, income test and residency requirements.

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

No.

To qualify for a Commonwealth Seniors Health Card (CSHC), which gives you access to cheaper health care, medications and, potentially, government services, you must have reached your Age Pension eligibility age, which depends on your date of birth. This is currently 66 years and six months, but is being increased progressively to age 67 from 1 July 2023.

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

Congratulations, if you retire at age 60 you may be 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.

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

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

State	Eligible age for Seniors Card
Australian Capital Territory	60 or over
NSW	60 or over
Northern Territory	60 or over
Queensland	60 or over with government concession card 65 or over without government concession card
South Australia	60 or over
Tasmania	60 or over
Victoria	60 or over
Western Australia	64 or over

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

Yes, but not if you retire.

A transition-to-retirement income stream (TTR or TRIS) is a pension paid to you from the money you have saved in your super account while you are still working. In some circumstances it can be a good way to scale back your working hours and start enjoying your transition into retirement without reducing your income.

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

You are eligible to start a TTR if you have reached your preservation age (currently 59), are still working and are a member of an accumulation super fund (90% of Australians are in these funds.)

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

When you retire at 60, you could be spending 25 years or more in retirement, so you’ll need to create a retirement income stream designed to last 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, including:

• How many years you will spend in retirement
• Whether you are a couple or single
• How much you plan to spend each year
• Whether you own your home
• What assets or income you have outside super
• How much your investments earn
• Whether you are eligible for the Age Pension
• How much super you want to leave your dependants.

To help you work out how much super you may need if you retire at 60, try ASIC’s MoneySmart Retirement planner calculator tool. It allows you to estimate the super balance you would need to generate different annual income amounts for both singles and couples.