I know you can access funds aged 65, no questions asked and at 60 if officially retired.
I've been told about being able to access funds at age 60 whilst not officially retired (still working part time maybe).
Could anyone elaborate on this please?
Accessing Superannuation at 60 Years Old
LEmcaljoe on 21/01/2023 - 09:06
Comments
It’s a rort, because you are allowed to access super tax free, and also pay into super if you are working at concessional tax rates.
You can put it in and withdraw the next day.Would you be taxed 15% on the money you pay in to super after 60?
Yes, for up to the concessional allowance, which is $27500 this year
@mskeggs: Yes, I don't think you can.
I think if you earn under $21710 then it is best NOT to make concessional contributions (or claim super as a tax deduction at the end of the financial year; after putting an intent to claim form in).
As earning under $21710 will be less on normal income tax rates (with the 1st $18200 tax free) than having the whole lot taxed at 15%.
So it’s like having sex just before midnight?
Audible groan
The definition of retirement changes at aged 60.
Before 60. You have to retire completely. After 60. You simple have to “cease an employment arrangement”.
So in other words, if you have a full time job and work at bunnings on the weekends, if you quit bunnings and are over 60 you meet the definition.
More info here.
https://www.ato.gov.au/Super/Self-managed-super-funds/Paying…
You “retire” from work. Do the paperwork to move your super to the pension phase. You get a new part time job.
If you are smart, you live off super and pay all/much of your income into super at reduced tax rates.
That's what my parents did. Drained their super completely and used it to pay off the house, which turned out to be a smart move as since then super real value has gone down but interest rates have gone up. Now they work part time hours because they got so bored.
From what I know It depends on your age and super fund when you retire
For example if you were on the old super schemes (ie defined benefit) and born before 1960 you can access it around 55.
*could have accessed it from eight years ago!
I was born in 1965 and have a preservation age of 60, but claimed my CSS pension at 55 after getting some advice on my options. At the time, I had intended to keep working until I was 60, but for a variety of reasons I pulled the pin last year. When I actually reach 60 in a few year's time, I can then access another bucket of money in another super fund when it suits me.
Hey Colin.
I am a bit confused.
I assume you had some restricted/non-preserved money that became unrestricted/non-preserved when you ended your employment arrangement. But you say you claimed it at 55 but kept working until last year?
Did you in fact end your employment arrangement at 55 access the money that was now unrestricted/non-preserved and then start another employment arrangement?
(Feel free to ignore this post if it is way off target and/or too personal).
To elaborate…..
I started working for Telstra in 1982, when it was still Telecom Australia. Back then, TA employees were covered by the CSS (we even had AGS numbers, later renamed to employee numbers) and contributed 5% post tax. Some of my fellow apprentices bitched and moaned about that at the time; they wanted that 5% to spend on cars, booze and other essentials. Hopefully they stayed with the CSS for as long as possible, and aren't bitching and moaning now. When Telstra ceased to be majority government-owned (remember T1, T2 & T3?) we were no longer eligible to contribute to the CSS. We were given a "once only offer" several times to roll out of the CSS and cut all ties, and many did. Myself and others were highly suspicious (why would "they" do anything for "our" benefit?), left what we had in the CSS as a Deferred Benefit member, and had future contributions go into the (then new) Telstra Super Scheme.
Had I wanted a lump sum from my CSS benefit then I would've had to wait until my preservation age (60), but other than that there were no restrictions. Since I have a bucket of money waiting for me in the TSS when I hit 60, it was a no-brainer to take the maximum CSS pension at 55.
By 55, I'd already left Telstra twice (worked for another company in between) and was contracting, not that any of that would've made any difference.
What you are looking for is Transition to Retirement. Basically, you can drawdown a minimum of 4% and maximum of 10% of your super. As you are over 60, the income to you is taxfree. The super fund continues to pay 15% tax on earnings until you go into full retirement phase.
A tax strategy is taking a salary sacrifice to super, while drawing down TRIS income.
Speak with your super fund to get full information.
Call your super fund and ask them.
OP, what is your preservation age?
OP, if you are over your preservation age and under 60 you will need to affirm you intend not to work.
OP, if you are over 60 you do not need to affirm anything; just tell your Super fund you are retiring.
As others have said look in to a TRIS. Good idea.
Transition to Retirement used to be much more beneficial but can be still worth it for those that are happy to begin the journey to retirement rather than fully retire.
I understand people would like to retire at 60 (or 65) if they are financially fit - but if not - is it a legal thing for company to "force" you into retirement. If the company has no issues in you working - can you continue working full time?
I've seen people work well into their 70s. Nothing the company can do other than make them redundant or harass them so they leave.
I’m glad OzBargain moved on from eneloops and road rules to retirement discussions.
You might consider arranging an appointment with Centrelink's financial information service. You do not need to be receiving/applying for Centrelink payments to use this service. It is FREE of charge, which is always good. They will provide a detailed, written report outlining your options including tax implications and any possible future Centrelink payment entitlement.
I did this a few years ago. It was very helpfulThanks for all of your comments. A lot of options. The transition to retirement path is interesting and I will make an appointment to meet with my fund and Centrelink.
I'm 'transitioning' at the moment, cutting back hours by over half, but casual work is plentiful and not as much of a drag.
Thanks again!
I've just set up my TRIS (I wish I'd known of it earlier) and it can save you a lot of money if it suits your circumstances.
I'm almost 62 and planned on accessing some of my super at 65 and paying off my mortgage - you can access all of it and keep working if you wish apparently.
With TRIS, I can now draw 10% of my super every year for 4 years which I put as an annual lump sum on my mortgage - I did the first tranche the other day.Assuming today's interest rates, I will save around $33000 in interest in the next 4 years. My 4 x 10% will obviously not earn superannuation interest but the savings on my mortgage will be greater than the short term returns on my super (they went backwards last year) The other advantage is that your mortgage reduces, therefore your LVR improves. I'd reckon the banks are more interested in what you owe(mortgage) than what you own(super).
Alternatively, you can get paid your TRIS as a fortnightly income and replace that amount in your super as a salary sacrifice (up to $27500 pa including employer contributions) . In this scenario, you're not losing super gains as you're replacing your TRIS income each pay.
I'm not sure how it works but I'm guessing there are tax ramifications if you are allowed to access your super.