Understanding Preservation Age and Access Conditions
For those born after 30 June 1964, preservation age is now set at 60. If you are aged 60 to 65 and not yet retired, you may access a portion of your super through a Transition to Retirement Income Stream (TRIS). This allows a regular income of 4% to 10% of your account balance per year. To access more or withdraw as a lump sum, you’ll need to meet additional conditions of release, like turning 65 or officially “retiring.”
Transition to Retirement Income Stream (TRIS) Explained
For individuals aged 60 and over, TRIS payments are generally tax-free, regardless of retirement status. However, the TRIS does not qualify for the “retirement phase” (where earnings are tax-free) until conditions such as retirement or reaching age 65 are met.
Meeting Conditions for Tax-Free Super Withdrawals
To meet the retirement condition for tax-free access, any current employment arrangement must end. If you’ve already reached age 60 when this occurs, no further requirements apply. If you were younger than 60, the super fund trustee must confirm your intent not to return to gainful employment on a full- or part-time basis (defined as at least 10 hours per week). You can, however, work fewer than 10 hours per week and still satisfy the retirement condition.
Key Considerations Before Withdrawing Super Funds
Carefully planning your super withdrawal strategy is essential to understanding the financial implications. Consider factors such as the minimum required pension withdrawals if starting a pension, the impact on your transfer balance account, and potential interactions with the Age Pension.
