Super is a compulsory, long-term investment designed to help members save for their retirement. When someone can access their super is different to when they can access the Age Pension.
1. When can a member access their super
Members can generally access their super when they reach age 60 and have stopped working.
Those currently under age 60, need to meet one of the conditions for early access, such as severe financial hardship or a terminal medical condition to be able to access their super.
2. How a member accesses their super
Once eligible to access their super, a member may be able to:
- get regular payments from their super using a retirement income product
- withdraw it as a lump sum
- access their money using a combination of both an income stream and lump sum.
Even when eligible, receiving money from super doesn’t happen automatically. If a member wants to receive regular payments from their super, they'll need to open and transfer their super into a retirement income account.
Pros of retirement income accounts
- Tax: Investment earnings are tax-free, and income payments are also tax-free over age 60.
- Income: Depending on a member's age and if they're still working, it could be a good option to replace or boost their income.
- Investing: If they keep their money in their income account, it stays invested in super while they get payments.
Cons of income payments
- Min/max limits: The government sets a minimum amount for an income stream. That means members must take a certain percentage of their balance in payments each year, based on their age. For Transition to Retirement Income accounts, there's also a limit to how much they can take out each year.
- Transfer limit: There's a limit on how much super they can transfer tax-free into a retirement income stream.
Call ART on 13 11 84 with any questions or for help.
Learn more about retirement income options
3. Will a member’s payment be taxed?
Once a member is over 60, there’s no tax payable on lump sums or income stream payments paid from their super.
4. Will a member be eligible for government benefits?
As well as super, a member might qualify for the Age Pension or other government benefits. To be eligible for the Age Pension they must meet the age and residency requirements and pass the income and asset test.
They may be also able to combine the Age Pension with their superannuation savings in retirement.
Age Pension Concierge Service
Generally, to be eligible for the Age Pension, Australians need to be at least 67 years of age. As we can have unrestricted access to super from age 65, it’s likely that many people will have drawn down some of their super before they’re eligible for the Age Pension.
If a member is eligible for some or all of the Age Pension, they may consider accessing this important retirement income stream as soon as possible, so their super will last longer in retirement.
It may not be as easy as it sounds, however. According to a survey conducted by financial advice firm, Retirement Essentials:
- 79% of prospective Age Pensioners surveyed say they want help with the Age Pension as obtaining the Age Pension is a source of stress and misunderstanding.*
- Only 44% of Australians reported applying for the Age Pension on time. The remaining 56% apply late and miss out on income they are entitled to. Nearly one third of which apply at least one year late, costing tens of thousands of dollars in severe cases. Missed payments are most often funded by withdrawals from super.*
At ART, we have a retirement income vision to be the leader in delivering better retirement outcomes for members through a lifetime of education, guidance and advice. Providing help with the Age Pension for income support fits right in with this vision.
ART has partnered with SuperEd to provide a service known as ‘Retirement Essentials’. This Age Pension concierge service will guide, assist and support ART members to apply for the Age Pension or Commonwealth Seniors Health Care Card to ensure they get all their Age Pension entitlements.
To find out more about Retirement Essentials, including the cost of the Age Pension concierge service, visit retirementessentials.com.au/art
For more information on the Age Pension visit the ART website
*Retirement Reality, Link Advice August 2022
5. Accessing super while still at work1
If a member has reached age 60, but not yet permanently retired, they may be able to access their super through a Transition to Retirement (TTR) strategy. To find out more about a TTR strategy, visit the ART website or watch our Super Insider episode ‘How to transition from work to retirement’.
Before a member withdraws their super
Has the member spoken to a financial adviser? What they do with their super can have a big impact on their future lifestyle. It may also affect any insurance they have in super.
Membership includes financial advice to help members make decisions about:
- Different ways to withdraw/access super
- How each option is taxed
- Their account and the Age Pension
- The best time and how much they may need to retire
Accessing advice may be the best option for employees in this situation. ART members can get information on advice here.
1. If a member holds a Defined Benefit account, there are some important considerations before they access their super when they’re still working. We recommend speaking with a financial adviser before making any decisions.