"I’m 66 years old and have recently stopped work full time in the hope of finding part time work. I am not yet eligible for the government pension and I’m wondering if I can access my super."
- Question from Paula in Kallangur, QLD.
Top answer provided by:
Thank you for submitting such a great and common question!
To be able to access your super and/or start a regular income stream from your superannuation, you first need to meet a “condition of release”.
There are a few ways to meet a condition of release, with one of them being, reaching age 65 (even if you are still working)….Age 65 is a magic number!
For more information on the “conditions of release”, please see this page on the ATO website
Being age 65 means that you are able to withdraw a lump sum amount from your super to meet your living expenses, and/or alternatively start an ongoing income stream (also known as a pension).
There are two main “phases” for superannuation:
- “Accumulation phase”, where you can continue to add to your super account (and withdraw lump sums if you have met a condition of release)
- “Pension phase”, where you can only withdraw from your account, and therefore cannot add to this account.
If you are looking to find part time work still, you will most likely need to keep a small super “Accumulation phase” account open so your new employer can place your super guarantee (10%) contributions in.
Firstly, you will need to decide whether you want to move:
- The full amount of your superannuation from “Accumulation phase”, to “Pension phase”, OR
- Keep a small balance in “Accumulation phase” (e.g. $10,000, so your potential new employer will be able to make super guarantee contributions), and rollover the remaining amount to “Pension phase”.
To move some (or all) of your funds in your super account to “Pension phase”, and start drawing a regular income stream, you can either contact your super fund directly to arrange this or alternatively, you can reach out to a financial adviser to assist you in the process. Either way, this is usually undertaken by completing an application form for a new pension account.
Lastly, just a couple of Key considerations:
- You can only have up to $1,700,000 in “Pension phase” – this is called the “Transfer Balance Cap”
- You will need to withdraw “minimum pension” payments from your pension account each year. The minimum pension payment amounts are based on age. Based on being age 66, your minimum amount for the current FY is 2.5% of the balance in “Pension phase”.
- Given you are over age 60, your pension payments to you will be tax-free.
For more information around account-based pensions, the Pros and Cons, please visit this page on Moneysmart.gov.au
I hope this helps!
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