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Accessing your superannuation in retirement

Published 7 September 2018

There are several ways to access your super. Gayle Bryant explores the options and which might work best for you.

While some of us have no intention of fully retiring any time soon – if ever – there will come a time when you’re able to access your superannuation savings. And since you can do that in a number of ways, it’s worth knowing your options so you’re prepared when the time comes.

When can you access your super?

Most commonly, you can access your super:

  • when you have reached your ‘preservation age’ and retired, or
  • when you have reached age 60 and ceased an employment arrangement, or
  • when you have reached 65 (even if you’re still working).

Your preservation age is the minimum age you need to reach in order to access your super. It can be from 55 to 60 years of age, depending on what year you were born.

When can I access my super?
Date of birth Preservation age (years)

Before 1 July, 1960


1 July, 1960 – 30 June, 1961


1 July, 1961 – 30 June, 1962


1 July, 1962 – 30 June, 1963


1 July, 1963 – 30 June, 1964


After 30 June, 1964


Source: ATO

How can you access your super?

There are three basic ways you can access your super. You can take it as:

  • a retirement income stream
  • a lump sum
  • a combination of both.

There are pros and cons to each option, depending on your circumstances.


Retirement income stream

Accessing your super in the form of a retirement income stream is also known as drawing a superannuation pension.

This option can help make your money last longer in retirement, as regular small payments are drawn down while the rest of your money remains invested in the market.

It can also help you to manage and budget your retirement income. Once you’re retired, your need for a regular income doesn’t stop. There are still bills to pay and everyday life to enjoy, so having regular income payments can help you to manage your household budget and other spending with more accuracy.

There may be some great tax advantages to this option, too. First, investment earnings inside this type of pension are not taxed. To secure this tax exemption you must withdraw a minimum amount each financial year, depending on your age and account balance.


Minimum annual pension withdrawal payments

Minimum annual pension withdrawal payments
Age of pension account holder % of account balance

Under 65


65 to 74


75 to 79


80 to 84


85 to 89


90 to 94


95 and above


Source: ATO

Second, the retirement income (or super pension) payments made to people aged 60 or over are generally tax free. If you’re between your preservation age and 60 years old, the taxable component of payments will be taxed at your marginal tax rate, less a 15 per cent tax offset.

You must consider the transfer balance cap of $1.6 million for the 2018-2019 financial year.  Introduced from 1 July 2017, it effectively limits the amount you can have in a superannuation retirement income stream.

Lump sum payment

You also have the option of taking your super as either a single lump sum or several large withdrawals spread over time.

While this may seem an attractive option that would allow you to pay off any outstanding debts – such as your mortgage – there are some implications to consider, the first of which is tax.

If you choose this option, withdrawn money is no longer considered to be super money, so if you invest it, any earnings gained outside your super account will be taxed at your marginal tax rate.

If you’re aged 60 or more, you can withdraw your super tax free. If you’re younger, you may need to pay tax. You can withdraw up to $205,000 (of taxable component) in 2018–19 at what is called the low-rate cap. This means you will pay a lower rate of tax, or possibly none. This limit applies between preservation age and under age 60. Any amount of taxable component you withdraw over this low-rate cap is generally taxed at 17 per cent including the Medicare Levy, or at your marginal tax rate, whichever is lower. If you’re below preservation age the whole amount withdrawn is generally taxed at 22 per cent including the Medicare Levy.

If you’re thinking about this option, you also need to consider what you’ll live on if there’s nothing left in your super account and you have no other income-generating assets. While the age pension is an option, it’s unlikely to provide you with a comfortable lifestyle.

So which option should you choose?

The best option for you will depend on your circumstances.

For example, a superannuation pension generally suits those who have fully retired and have the flexibility to draw down at least the minimum amounts.

However, if you need a lump sum to pay off your debts, then drawing it out of your super might be your best approach, especially if you have other assets outside super that you can use to fund your lifestyle.

A third option would be to draw down a lump sum just enough super to pay off your debts, and then start a super pension with the remainder.

If you’re nearing the time when you’ll be able to access your retirement income, start discussing these options with your financial adviser or accountant now, so you can make an informed choice based on a comprehensive understanding of the pros and cons of each.


All case studies are hypothetical and are not meant to illustrate the circumstances of any particular individual. Taxation law is complex and this information is our interpretation of the law. It has been prepared as a guide only and does not represent tax advice. You should seek independent tax advice specific to your individual circumstances from a tax adviser or registered tax agent. Superannuation is a long term investment and the rules and regulations governing it are subject to change. ANZ recommends that you keep informed of the changes to superannuation and any potential impact any changes may have.

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