A Basic Guide to Your Superannuation and Preservation Age
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A Basic Guide to Your Superannuation and Preservation Age

Hardworking employees in Australia have the right to their superannuation. It is a regular payment made into a fund by an employer that can finance an employee’s retirement. This helps ensure that you enjoy your later years in greater comfort.

Employers are obligated to contribute a superannuation guarantee of 10% of your gross income to your super, which provides “forced” savings that can be beneficial in more ways than one.

While the Age Pension can help ease your financial burdens once you retire, Australia’s government understands that superannuation is necessary as senior citizens will still need an income stream to cover different needs throughout their retirement. You don’t have to worry about being strapped for cash during retirement with the help of your superannuation. However, you need to keep in mind that your funds will not be accessible unless you reach your preservation age.

What is the Preservation Age?

The preservation age defines the earliest age you can withdraw your super. Why is this so? Remember that your superannuation is reserved only until you reach a certain point in your life. Your preservation age is calculated based on your date of birth. Check out the table below for a more thorough outline:

Birthdate  Preservation Age 
Before 1 July 1960 55
1 July 1960 — 30 June 1961 56
1 July 1961 — 30 June 1962 57
1 July 1962 — 30 June 1963 58
1 July 1963 — 30 June 1964 59
On or after 1 July 1964 60

To protect your entitlements and ensure you don’t deplete your superannuation before you reach the right age to retire, ATO has set some preservation rules. It guarantees that your withdrawal will be released satisfactorily. These conditions of release govern when you can access your super, which can be done in three ways:

  • You can access your super without restrictions only if you reached your preservation age or permanently retired before 60-years-old. For the latter, you have to make a declaration to your super fund regarding your plans to permanently stop being part of Australia’s workforce.
  • You don’t have to officially retire once you reach 60-years-old, though you can stop an employment arrangement and access your super even if you have plans to return to work within a few years. Keep in mind that you will have to reset the condition of release when accessing your contributions after leaving your job.
  • Whether or not you choose to officially retire from work, so long as you are 65-years-old, you can withdraw the full amount of your super without any restrictions.

Understanding the Preservation Age and Your Super

Different people have unique needs and lifestyles, so there are ways to access your super without retiring yet so long as you reach your preservation age. While it doesn’t provide tax-free withdrawals, it’s a benefit that can help cover emergencies when the going gets tough. But if you can wait until you reach 65-years-old to access your super, you can enjoy your retirement fully without having to worry about paying taxes.

How Can We Help You?

Everyone wants to have a secure financial plan, but most of us aren’t sure how to start. Thankfully, we’re here to help with whatever you need to achieve financial independence as you grow older.

To know more about tips in managing your superannuation, check out these posts:

Coastal Advice Port Macquarie guides clients to enjoy their dream retirement through excellent financial planning and personalised advice. From retirement planning, superannuation advice to creating self-managed super fund investment strategies, we’ve got you covered.

Looking for a financial adviser in Port Macquarie? Reach out to us today!


DISCLAIMER: The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice Group’s position and are not to be attributed to RI Advice Group. They cannot be reproduced in any form without the express written consent of the author. This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice. Newcastle Financial Planning Group, Central Coast Financial Planning Group, Sydney Wealth Advisers, Coastal Advice Port Macquarie and Coastal Advice Ballina Byron are subsidiaries of Coastal Advice Group Pty Ltd which is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.
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