Super is a great way to save money for your retirement. It is generally taxed at a lower rate than your regular income. You typically pay 15% tax on your super contributions, and your withdrawals are tax-free if you're 60 or older. The investment earnings on your super are also only taxed at 15%.
Before you turn 60, pension payments are taxed at your marginal tax rate less a 15% tax offset. When you turn 60, your pension payments (or any lump sum withdrawals) are usually tax free.
There are absolutely no restrictions to accessing your Super Benefit when aged between 60 and 64 after you are retired. There are two ways you can access your Super; either as a lump-sum payment or as a pension.
Superannuation Guarantee (SG)
If you are aged over 60, your employer must still pay SG contributions on your behalf into your super account. The SG contribution rate is currently legislated to rise incrementally to 12% in July 2025. Learn about SG contribution rates.
You can access your super as long as you've permanently retired. If you end an employment arrangement on or after age 60, you can also access the super you've earned up until then. If you're not ready to retire, you could use some of your super while you're still working, with a Transition to Retirement Income account.
Even if you have super, you may still qualify for at least a part age pension from the government. Even though Australians have had compulsory super since 1992, many may qualify for — and may need to rely on — an age pension to some degree in retirement.
Making personal super contributions. Once you reach age 75, you are ineligible to make further non-concessional personal contributions into your super account, regardless of your work status.
You may be able to take your superannuation as a lump sum payment when you retire. This is usually tax-free from age 60.
Age 60 or over and ceasing employment
You can access your super if you're aged 60 and over and you stop working, even if you subsequently get another job with another employer. As mentioned earlier, super payments are generally tax free once you turn 60.
Whether the money in your super account is tax-free or taxable when you withdraw it generally depends on the type of contributions made and whether tax was paid on it. Non-concessional (after-tax) contributions – those made from income after you paid tax on it – are tax-free when withdrawn from your super account.
Those aged 60 or over don't pay tax on any money withdrawn from super. However, if you are under 60, you will likely have to pay tax. How much tax you pay depends on whether you have reached your preservation age. Your preservation age is based on your date of birth as set out below.
If you withdraw money from your super fund, you must tell Centrelink within 14 days.
The minimum amount that can be withdrawn is $1,000 and the maximum amount is $10,000. If your super balance is less than $1,000 you can withdraw up to your remaining balance after tax. You can only make one withdrawal in any 12-month period.
Assume, for example, you will need 65 per cent of your pre-retirement income, so if you earn $50,000 now, you might need $32,500 in retirement.
There are annual caps (or limits) on the amount of non-concessional contributions you can make into your super account. This annual cap increases in line with indexation of the concessional (before-tax) contributions cap. The general annual cap for non-concessional contributions for 2023–24 is $110,000.
How much can I contribute? The maximum you can contribute is $300,000 or the sale price of your home, whichever is less. You may make more than one contribution, but the total must not exceed this maximum. You may contribute less than the maximum.
This obviously depends on what annual income you want to fund but if you want to be able to afford a comfortable retirement—which is an income of just over $48,000 a year for a single according to the ASFA Retirement Standard—then you need a balance of at least $500,000.
According to the Association of Superannuation Funds of Australia's Retirement Standard, to have a 'comfortable' retirement, single people will need $595,000 in retirement savings, and couples will need $690,000.
A helpful cost of living benchmark prepared quarterly by the Association of Superannuation Funds of Australia (ASFA), shows an average single person needs approximately $595,000 in superannuation before retiring, while a couple requires around $690,000.
The Work Bonus income bank is useful for pensioners who wish to work, particularly those who undertake intermittent or occasional work. Note: from 1 December 2022 to 31 December 2023, a one-off, temporary credit of $4,000 applies to Work Bonus income bank balances.