Withdrawals from super

Conditions for withdrawal

1. Aged 65 or older

If you’re aged 65 or over you can withdraw a lump sum even if you are still working.

2. Reach preservation age and retire (or start a transition pension)

Preservation age
Date of birthPreservation age
Before 1 July 196055
1 July 1960 – 30 June 196156
1 July 1961 – 30 June 196257
1 July 1962 – 30 June 196358
1 July 1963 – 30 June 196459
From 1 July 196460

Retirement means you have ceased gainful employment either:

  • when you were 60 years old or over
  • before you turned 60 years old and have reached your preservation age. Your fund trustee must be satisfied you have no intention of becoming employed ever again.

3. Satisfy an early access requirement.

  • Compassionate grounds
  • Terminal illness
  • Severe financial hardship
  • Incapacity
  • First Home Super Saver scheme
  • Temporary resident leaving Australia

Tax on withdrawals

The amount of tax you pay depends on the following factors;

  • What proportion of your funds are taxable and tax-free
  • Your preservation age and your age when you make the withdrawal
  • Whether you are making the withdrawal as a lump sum or pension
  • Whether it is a death benefit income stream
  • Whether you exceeded;
    • Defined benefit income cap (rare)
    • Low rate cap (currently $235,000)
    • Untaxed plan cap (currently $1,705,000)

For example;

  1. If you’re under age 60 and withdraw a lump sum (from a taxed super fund):
    • You don’t pay tax if you withdraw up to the ‘low rate cap’, currently $235,000.
    • If you withdraw an amount above the low rate cap, you pay 17% tax (including the Medicare levy) or your marginal tax rate, whichever is lower. If you are under your preservation age you pay 22% tax (including the Medicare levy) or your marginal tax rate, whichever is lower.

2. If you’re aged 60 or over and withdraw a lump sum from a taxed super fund (and most are) it is received tax-free.

For most people it is fairly straight forward but your situation may be more complex, so see an expert before making a decision.