Super: Withdrawing and Using

Your super is the money you have contributed to your super fund over the years, together with any earnings and gains on this money, less any amounts you have withdrawn and any fees.

To be clear: your super includes: contributions from an employer or from you, earnings on your contributions, and any investment return earned by these amounts. Your super also includes other super funds to which you have rolled over (transferred) a lump sum or benefits from your super fund.

Using your super

Retiring is a big deal. You’ve probably worked hard for many years and you’re thinking about what you can do with your super money. At the same time, though, you’re wondering what the rules are when it comes to using your super.

If you’re thinking about taking your superannuation before you retire, it’s important to understand the rules and how it might affect you. There are different ways to access your superannuation while you are still working.

Withdrawing super

You can make a withdrawal if you meet a condition of release. For example, if you have reached your preservation age and retired, or if you have reached age 60 and ceased an employment arrangement.

You can withdraw your super as a lump sum if you’ve reached your preservation age and retired, or reached age 65, 65 years old or older. You can also apply for early release of your super under special circumstances, such as severe financial hardship, compassionate grounds or permanent incapacity.

You can only access your super in the form of a lump sum and have it paid directly into a nominated bank account. You should check with your super fund before making any decisions about withdrawing your super.

What are the tax consequences of withdrawing my super?

Cashing in your super is one of the biggest financial decisions you’ll ever make, so it’s important to think about the tax implications before you sell off your hard-earned savings.

Withdrawing your super early – before you reach retirement, or what’s known as ‘preservation age’ – can result in a tax rate as high as 93%, depending on how much you take out. That’s because early withdrawals from superannuation are treated like income and taxed accordingly.

What is ‘preservation age’?

Preservation age is the earliest age you can access your superannuation, which is usually after you retire. This means that unless you qualify for an exception, any super funds you withdraw before reaching preservation age will be taxed at a higher rate.

Your preservation age depends on when you were born:

  • Before 1 July 1960: 55 years and over
  • Between 1 July 1960 and 30 June 1961: 56 years and over
  • Between 1 July 1961 and 30 June 1962: 57 years and over
  • On or after 1 July 1962: 58 years and over


The decision of when to use your super will depend on the future plans you have. Your best option is to discuss with an accountant and make an informed decision on how and when you can use your super. It’s not as simple as just withdrawing it all at once and starting again, but it can assist you in getting the most from your retirement.

If you’re needing help, contact us today!

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