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Access to your Superannuation

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This month’s Wealth Pipeline discusses when and how you can access your superannuation while in good health.

Access to your Superannuation

Preservation age is the age a member must reach before their super can be accessed. The main catalyst for penning this wealth pipeline was to remind our clients that as of 1st of July 2015, the preservation age will commence to increase from age 55 up to 60.

Knowing when you can access your superannuation requires an understanding of how the preservation rules and conditions of release interact. The following tables show preservation ages and the access rules applicable to the different components of a member’s super balance.

Preservation Ages
Date of birth fromToPreservation Age
  30 June 1960 55
1 July 1960 30 June 1961 56
1 July 1961 30 June 1962 57
1 July 1962 30 June 1963 58
1 July 1963 30 June 1964 59
1 July 1964 and later   60
Preservation Components & Access Rules
Preservation ComponentWhen it can be accessed
Unrestricted non-preserved Any time
Restricted non-preserved When a suitable condition of release is met
Preserved When a suitable condition of release is met
Conditions of Release
 DefinitionNotes
Retirement

1. From preservation age:
If an arrangement under which the member was gainfully employed has ended, and the trustee is reasonably satisfied the member intends to never be gainfully employed for more than 10 hours per week; OR

2. From age 60:
If an arrangement under which the member was gainfully employed has ended after turning age 60.

- No cashing restriction
- Either definition can be relied on from age 60
Attaining age 65   No cashing restriction
Attaining preservation age   Limited cashing restriction:-
Benefits may only be taken as a transition to retirement income stream.
In what form can I access my superannuation?

Superannuation benefits can be taken as either a pension and/or lump sum if the preservation component is unrestricted non-preserved (UNP) or if the member has met a condition of release (which effectively converts the preservation component to UNP). Technically speaking attaining preservation age does not satisfy a condition of release. It does however allow a superannuation member to receive a Transition to Retirement income stream/pension (TTR). The only difference between a standard superannuation pension and a TTR is that a TTR has a maximum payout of 10% of the pension’s value per year.

Our Comments

Just because you can access your superannuation does not mean you should. If you access your superannuation careful consideration should be made determining whether it should be paid a pension and/or lump sum. Tax is typically the main consideration in determining how a superannuation benefit should be paid.

By: February 28, 2015 Superannuation Tags: , ;