super in your 60s and 70s

Learn about how you can access your super

There are a number of options and products that are available in retirement. You may wish to take your super out in a lump sum, start a pension with the money, or some combination of these two. There are even superannuation annuities that will pay you a guaranteed income for your lifetime.

It is common to withdraw a lump sum if you have some significant expenses, or residual debt that needs to be paid off.

Most retirees will use at least part of their accumulated superannuation to commence a pension. This allows you to draw regular income for living expenses, keep the funds invested in the concessionally taxed superannuation environment, but still have access to lump sums if needed.

The earliest you are likely to have access to your super is 60.

If you need to help to understand your options and to plan ahead, consider seeking independent financial advice.

You may need to get personal financial advice to help you plan

The years leading up to retirement is a good time to consider getting personal financial advice. A financial adviser can help you to plan ahead, model your likely retirement outcomes, and assist you to make any changes that are needed. You financial adviser should be an expert in superannuation strategies and retirement planning.

It is generally accepted that it is best to seek independent financial advice – advice that is free from conflict or bias.

See if you’re eligible for the government co-contribution

The super co-contribution helps eligible people boost their retirement savings.

If you are a low or middle-income earner and make personal (after-tax) super contributions to your super fund, the government also makes a contribution (called a co-contribution) up to a maximum amount of $500.

You may become eligible if you have reduced your hours leading up to retirement.

Review your investment option

Your super fund invests your money for you. Most funds let you choose from a range of investment options, from conservative to growth.

With fewer years to retirement it may be wise to be thinking about when you intend to access your super. You should be well aware of the level of investment risk you have in your superannuation savings. This is especially true if you have recently retired.

It’s worth taking the time to check your options and decide what’s right for you. The options you choose can make a big difference to how long your super lasts.

Investment returns will also play a significant role in your wealth creation and income generation in retirement. Taxation of super is different in retirement, so it will be prudent to learn about that.

You can find out about your fund’s investment options by checking its website or product disclosure statement (PDS).

Most funds allow you to change your super investment options online.

You may wish to consider how your superannuation investments complement any wealth creation you are conducting outside of super.

There are various Commonwealth entitlements and concessions available to retired persons. Most are means tested, so you may not be able to (immediately) rely upon these.

Make a lump-sum contribution to super – if you are able

Leading up to retirement you may wish to give your super fund a final large contribution. You are able to make a large ‘non-concessional’ contribution. With the ‘bring-forward’ rule, you can make up to three years of non-concessional contributions in a single go. If you have significant cash outside of super that you can put towards your retirement savings, this can be a great way of getting larger amounts (up to $300,000 per person in most cases) into super.

Learn about downsizer contributions

If you are 65 years old or over you may be able to make a downsizer contribution into your superannuation of up to $300,000 (per person) from the proceeds of selling your home.

Your downsizer contribution is not a non-concessional contribution and will not count towards your contributions caps. The downsizer contribution can still be made even if you have a total super balance greater than $1.6 million.

The downsizer contribution will count towards your transfer balance cap, currently set at $1.6 million. This cap applies when you move your super savings into retirement phase.

You can only access the downsizer scheme once, and the contributions are not tax deductible and will be taken into account for determining eligibility for the age pension.

If you sell your home, are eligible and choose to make a downsizer contribution, there is no requirement for you to purchase another home.

Transition-to-retirement strategies

If you are over 55, there are certain retirement income products that allow you to access your superannuation whilst you are still working. You may be able to start a transition-to-retirement (TTR) pension, which can supplement your income, enabling you to reduce your working hours should you need or desire.

Small business super contributions

If you are a business owner there are a number of tax concessions available if you sell your business and contribute some of the proceeds into your super fund.

There are 4 different rules that you can use to reduce or even eliminate the capital gains tax (CGT) bill upon sale.

You should seek professional tax and financial planning advice for this.

Consider how much you will need to live on in retirement

You should have a budget for your income and expenses in retirement. It’s important to understand how much you can safely spend each year. You will need to think about this to make sure that you have enough to last your lifetime. There are online calculators to help you project the value of your super at retirement.

You can also use online calculators to project the income you can expect to receive from your superannuation in retirement.

If you need to help to understand your options and to plan ahead, consider seeking independent financial advice.

Check your beneficiary nomination

You are able to choose who receives your superannuation should/when you pass away. If you don’t choose (nominate) someone, your super fund will decide who is to receive your super money. This will include any insurance you might have.

Previous nominations may need to be reviewed in the light of a relationship breakdown, or children who are now adults.

For a beneficiary nomination to be valid, you need to choose a dependent. This can be your spouse, a child, or your estate. Check to see if your super fund offers a non-lapsing nomination, as binding nomination will expire after 3 years.

If your personal situation is complex, you may wish to seek legal or financial advice.