Your super can help fund your life after work, and you get to decide how.
Your super on day one of retirement
When you stop working, your employer usually stops paying super into your account. Any extra contributions from your salary usually stop too.
Next, depending on your situation and whether you can access your super, you decide how you use your money in retirement.
You may be able to set up a regular income stream that pays you over time. You could also take a lump sum to pay off debt or cover a big cost. Or you could choose a combination of both.
When can you get your super?
You do not get your super automatically when you retire. You can only access it when you meet certain conditions of release.
In most cases, you can access your super when one of these apply:
- You reach age 60 and stop working for an employer, even if you continue working elsewhere.
- You reach age 60 and permanently retire from the workforce. This usually means you do not plan to work in a paid job for more than 10 hours a week.
- You turn 65. At 65, you can usually access to your super, even if you still work.
For more detail, see getting your super.
You may be able to access your super early in some situations, such as:
- permanent incapacity
- severe financial hardship
- compassionate grounds
- terminal illness
- if you are a temporary resident and permanently leave Australia.
You must meet the rules to qualify for early access. Learn more at when you can access your super early.
High-pressure sales tactics are putting your super savings at risk. Be on red alert for phone calls, click bait advertising and promises of unrealistic returns to encourage you to put your super into risky investments. Stop, think carefully, and check the claims first.
Read the investor alert and our tips on how to protect your money.
Decide what happens to your super
When you retire, you can use your super in different ways. You can:
- leave it in your super fund (your money stays invested in the way you’ve chosen)
- set up a regular income stream (for example, an account-based pension or annuity)
- take some out as a lump sum (for example, to pay off a debt or cover a big cost like a holiday)
- take out all your super
- use a combination of a regular income stream and a lump sum.
Once you take money out, you may not be able to put it back in. So it’s important to think carefully, and to know if your decision might impact your tax, insurance or the government Age Pension. Consider seeking financial advice.
When you’re ready, contact your super fund to ask what choices you have and what forms you need.
You may also want to seek advice from a registered financial adviser. You can check an adviser’s details on the Financial Advisers Register.
See retirement income sources for more details.
Barry calls his super fund
Barry is retiring in 3 months. He’s excited and wants to understand what happens to his super when he stops work. He calls his super fund and asks about his options, and to understand how tax and insurance might work. The fund explains his options and helps him fill out the forms to open an account-based pension. After Barry stops working, he starts getting regular payments from his account-based pension.
If you have a defined benefit super plan
These plans work differently to other types of super. For example, you may be able to get a lifetime pension, a lump sum, or a combination of both.
If you take a lump sum, you may be able to take it as cash or roll it over into another super account. Your rules depend on your plan, so check with your super fund or employer.
If you have a self-managed super fund (SMSF)
As an SMSF trustee, you need to follow extra rules and responsibilities. This can include keeping records, meeting deadlines and managing payments from the fund.
If you’re not sure how you can access your super, speak to a registered financial adviser, your SMSF administrator or accountant. See self-managed super funds (SMSF).
Insurance through super
Many super funds automatically include insurance, so it’s worth checking what you have and what it costs. Any cover you have may change or end when you stop work or reach a certain age, so ask your super fund for these details. See insurance through super for more information.
How super is taxed
Most people won’t pay tax when they withdraw super. This is because many people first access their super at age 60 or older, and payments made from super to people aged 60 or over are generally tax free.
Some super payments can be taxable.
The tax you pay depends on things like:
- your age
- why you withdraw the money
- the taxable component of your super, and
- whether you take your super as an income stream or a lump sum.
You can choose one option or a mix of options. Withdrawing super can also affect your eligibility for income support payments and allowances.
See tax and super for more details. You can also consider seeking financial advice before you withdraw your super.
Key actions you can take
- Check when you can access your super.
- Talk to your super fund or registered financial adviser about your options.
- Learn about retirement income options for when you stop working.