How to access your super and keep working

You may be surprised to learn that you don’t need to stop working completely at age 60 to start accessing your superannuation. The super rules recognise that retirement doesn’t need to be a single moment but can be a gradual transition, and they provide several pathways to access your super while you continue earning an income.

Starting a Transition to Retirement plan

Once you reach age 60 you’re able to start accessing up to 10% of your super each financial year as a tax-free income stream, even while you’re still working.

You can do this by opening a Transition to Retirement (TTR) account.

Rolling over super from your existing super account into a TTR account allows you to start receiving regular tax-free income payments in addition to your regular salary. You can choose how much income you want to receive and how often you receive payments. legalsuper requires a minimum TTR investment of $20,000.

Alongside your TTR account, your employer can continue to make their Superannuation Guarantee (SG) payments into your existing super accumulation account, where you can also continue to make salary sacrifice and personal super contributions.

Many people take advantage of the tax-free income benefits of having a TTR account to maintain their normal take home pay while reducing their actual work hours.

Others may continue working full-time but use their extra TTR tax-free income to fund their living expenses while increasing their salary sacrifice contributions from their taxable income to improve their retirement position in a tax effective way.

Case study: Leanne

Leanne works for a law firm, has just turned 60, and wants to boost her super in the final years before her retirement.   Because she is 60 she has met a legal condition of release, ie., attaining preservation age, of her super. Leanne opens a TTR account and uses the income to replace part of her salary while increasing her salary sacrifice contributions.   Leanne’s overall income remains steady, however more of her pre-tax salary is now being invested into the super environment and is only taxed at 15%.

Stopping a job after 60

If you cease any gainful employment arrangement after turning 60, including a contract, you are considered under the Superannuation Industry (Supervision) Regulations 1994 (SISR) to be retired for superannuation purposes, even if you remain in another job or take up new work.

This means you can start accessing your super once you roll over money from your existing super account into an Account Based Pension (ABP). Once your super is inside an ABP any investment earnings and the amounts you withdraw as income are tax-free. legalsuper requires a minimum of $20,000 in a ABP.

At the same time, even though you’ve met a condition of release, you can maintain a separate super accumulation account to receive any future employer Superannuation Guarantee (SG) payments as well as your salary sacrifice and personal super contributions. Future contributions are preserved until another condition of release is satisfied, eg., attaining age 65.

Case study: Trevor

Trevor has turned 60 and works full-time for a large law firm. In addition, for years he has been providing non-competitive legal consulting services after-hours to another smaller firm. By mutual agreement with Trevor the smaller firm formally ceases its casual employment arrangement with him. Because Trevor has ceased a gainful employment arrangement after age 60, under superannuation law he has met a condition of release, even though he’s still working in his existing full-time job. Trevor can roll most of his super funds into an account-based pension and also maintain his super accumulation account to receive his employer Superannuation Guarantee (SG) payments, salary sacrifice and personal super contributions. Unlike a TTR account, Trevor can have unrestricted access to his super. His ABP account allows him to choose to receive regular tax-free income payments and/or withdraw tax-free lump sum amounts from his retirement savings.   Another major advantage of having an ABP is that all Trevor’s investment earnings are tax-free.

Automatic access at 65

At age 65, the conditions of release super rules simplify completely. Anyone who has reached 65 can access their super at any time, regardless of whether they are working full time, part time or not at all. No retirement declaration is required.

Case study: Robyn
Robyn is 65, enjoys her work, and plans to continue working for several more years. Even so, alongside her existing super account, she can start an ABP, take lump sums and restructure her super however she chooses. Her work status no longer affects her access to super.

A more flexible retirement journey

The super rules are designed to support the diverse ways Australians approach retirement.

Whether you’re easing into retirement, changing jobs after 60 or continuing to work well past 65, you have options to access your super in ways that suit your personal circumstances and goals.

Members of legalsuper’s specialist Member Services Team are available for in-person or online meetings to discuss or review your super strategy and offer general advice. Book an appointment online or call us on 1800 060 312.