When are you planning on accessing your super and how will you access it?
If you haven’t thought about when and how you'll access your super, it’s important to know that you can generally access it once you’ve reached preservation age, which will be somewhere between 55 and 60 years old, depending on when you were born.
While that mightn’t be for a while, it could be worth thinking about how you’ll go about it.
In this short video (3.10), AMP employee Natalie discusses the different ways you can access super—whether as a lump sum, account-based pension or via an annuity product.
There could be tax advantages and disadvantages depending on which option you choose, so it’s important to consider your own personal circumstances before making any decisions.
We’re here to help
For more information:
- Learn more about the basics of super, the different types of super contributions and how consolidating your super could minimise the fees you pay
- Try our super simulator to see if you’re on track to achieving your retirement savings goals
- See how additional contributions can grow your balance with our salary sacrifice calculator
- Find the right financial adviser for you.
About this video
In this video Natalie from AMP talks about some of the different ways you can access your super, which generally won’t be until you turn 65 or when you reach preservation age.
Your preservation age can range from 55 to 60, depending on when you were born.
While you may not be able to access your super right now, you may want to plan how you’ll do it.
If you access your super as a lump sum, you can use the whole amount as you choose.
Bear in mind, you might have to pay tax on the lump sum if you are under age 60 and you’ll be taxed on the interest, or possibly on the capital gain you make from something you might invest in.
Once your money is out of the super system you’ll also lose potential tax benefits.
Another option is an allocated pension (also known as an account-based pension) which provides you with an income stream by paying you money from your super account on a regular basis.
You’ll have to withdraw a minimum amount, which will be a percentage of your account balance, each year depending on your age.
Your pension’s investment earnings will be tax-free and your income stream payments also become tax-free once you reach age 60.
Remember, it’s your money you’re drawing on and it could run out, so you’ll need to think about the way your super is being invested ahead of retirement and while in the pension phase.
Your third option is purchasing an annuity product. These generally pay a guaranteed series of payments over an agreed period of time.
They tend to be a secure option as they provide a guaranteed income regardless of what might happen in financial markets. However, you will be sacrificing flexibility as you cannot easily make lump sum withdrawals and life expectancy is also a major consideration.
A financial adviser can help you understand the differences and which option is best for you.
Superannuation can’t be included in your will unless you’ve specified certain instructions with your super fund first.