Accessing Your Super at 60: Rules, Options, and Key Considerations

Turning 60 is a major milestone for Australians. While it often marks the age you can access your super, that doesn't necessarily mean you should—at least, not without a plan.

Deciding how and when to access your nest egg is one of the biggest financial decisions you will make. It affects your retirement income, your tax bill, your lifestyle, and even your eligibility for the Age Pension.

In this guide, we'll break down the rules of access, compare your withdrawal options, and highlight the critical factors you must check before moving a single cent. If you're just getting started with super, check out our Getting Started with Superannuation guide first.

Part 1: The Rules (When Can You Touch Your Money?)

Just because you have hit the big 6-0 doesn't mean it is a free-for-all. To access your super, you must meet a Condition of Release. The Australian Taxation Office (ATO) sets out these rules clearly in their official super access guidelines ↗.

From age 60, you can access your super if you meet one of these three conditions:

1. You leave a job: Even if you plan to get another job later, you can access the super you have accumulated up until the day you quit that specific role.
2. You permanently retire: You stop working and have no intention of working 10 hours or more per week in the future. You will usually need to sign a declaration for this.
3. You turn 65: Once you hit 65, the gates open. You don't need to be retired; you can still work full-time, but your super becomes fully accessible.

Part 2: Income Stream vs. Lump Sum

Once you are eligible, how do you actually get the money out? There are two main methods, and most retirees end up using a mix of both.

1. The Income Stream (Account-Based Pension)

This is the most common route. You keep your money invested, but you switch the account from "accumulation" mode to "pension" mode.

• The Pros: You receive a regular "paycheck" (fortnightly or monthly). If you are over 60, these payments are generally tax-free. Your investment earnings also remain tax-free.
• The Rules: You must withdraw a minimum percentage of your balance every year (starting at 4% for those aged 65-74). See the current minimum drawdown rates on the ATO website ↗.
• The Cap: There is a limit on how much you can transfer into this tax-free environment. Check the current Transfer Balance Cap on the ATO ↗.

2. Lump Sum Withdrawals

This involves taking out large chunks of cash or one-off amounts.

• The Pros: Great for clearing debt (like a mortgage), helping children, or funding big bucket-list items like a caravan trip around Australia.
• The Cons: Once the money leaves Super, it is no longer in a low/zero tax environment. Large withdrawals also increase the risk of your money running out too early.

Part 3: Critical Considerations Before You Withdraw

Accessing super isn't just a transaction; it's a strategy. Before you sign the paperwork, consider these five areas to avoid costly mistakes.

1. Longevity Risk

Will your money last as long as you do? Before withdrawing, create a retirement budget. Use tools like the Moneysmart Retirement Planner ↗ to project how long your balance will last based on your desired spending. You want to avoid the scenario of looking for casual work at 72 because the money ran dry.

2. The Age Pension

Services Australia (Centrelink) ↗ assesses your eligibility using an Assets Test and an Income Test.

• Super in Accumulation or Pension phase: Counted for both tests.
• Lump Sums: If you take it out and keep it in the bank, it is still assessed. If you gift it away, it might still be counted under gifting rules ↗.

3. Insurance Implications

This is a common trap. Many people hold Life or TPD insurance inside their super.

• If you withdraw your full balance, or if your balance drops too low to cover premiums, your insurance might be cancelled automatically.
• Once lost, it can be expensive or impossible to reinstate due to health changes.

Always check your cover before moving funds. You can use our Super Fund Lookup to find your fund's contact details.

4. Investment Strategy

When moving to a pension phase, you need to find the "Goldilocks" zone for risk.

• Too conservative: Your money won't grow enough to last 30 years.
• Too aggressive: A market crash early in retirement could devastate your income.

Gradually dialing back risk while maintaining some growth assets is usually the best approach. ASIC's Moneysmart investment guides ↗ can help you understand your options.

5. Estate Planning

Who gets your super when you pass away? Super doesn't automatically form part of your Will. You need to check your Death Benefit Nominations. Ensure they are valid and binding so your money goes to the people you care about, rather than causing family arguments later. The ATO has more information on super death benefits ↗.

Summary

Accessing your super isn't just about when—it's about how. The decisions you make now regarding lump sums versus income streams, tax, and insurance will shape your lifestyle for decades.

If you are approaching 60 and feeling overwhelmed by the rules, consider seeking professional advice. A financial adviser can help you tailor a strategy to maximize your entitlements and ensure your money lasts the distance.