What is super preservation age?

Super terminology is not for the faint of heart, with numerous legislation and conditions lathered in industry jargon. If you are looking into withdrawing your super and how to go about it, you might have come across the term preservation age. 

Curious about how the super preservation age is the ultimate gatekeeper? This guide will walk you through the ins and outs of preservation age and how you can access your super - when the time is right.

Your superannuation preservation age is the earliest age at which you can access your super savings. It’s called the preservation age because your super is considered a preserved benefit as it is kept under tight lock until you are of age - can I see some ID please? 

The preservation age is calculated on the year you were born and determines when you are eligible to be able to withdraw your super. The preservation age currently ranges from the ages of 55-60 years, with anyone born after 30 June 1964 having a preservation age of 60 years.

Your preservation age is for accessing money that is being preserved in your superfund during all of those years of your working life. The retirement age or pension age, is the age at which you could be eligible for the government age pension. 

The Age Pension is a payment from the Australian government designed to support the basic living needs of older Australians. There are age and residency requirements and it requires means-testing. The pension age ranges from 65-67, and is currently 67 for anyone born on or after 1957.

In order to access the money in your superfund, you will need to meet one of the 4 following conditions*: 

1. Reached your preservation age and retired
2. Reached your preservation age and have begun a transition-to-retirement income stream
3. Ended your employment arrangements on or after the age of 60
4. Are 65 years of age or older

*unless you are eligible for early release below

The age you can access your super (or your preservation age) is dependent on the year you were born and whether or not you are still working. To find your preservation age, look for the year you were born in the below table.

Source: ATO.gov.au Super Withdrawal Options

Once you reach your preservation age and retire, you can choose to either withdraw your super in a lump sum or take regular pension payments. You can decide to withdraw some or all of your funds, whether it be for something big or small. If you go for the pension payments, you can choose to take them fortnightly, monthly, quarterly or annually depending on your provider.

If you have reached your preservation age and would like to withdraw your super, you will need to have fully retired or begun the process of retiring or be over the age of 65.

If you have not retired and are still working, but still want to access your super, it will need to be on reduced working hours - this is called ‘transitioning to retirement’. As you reduce your hours of work, you can start a transition-to-retirement (TTR) income stream. The income you would usually earn from working your old hours will be supplemented with payments from your superfund.  If you are looking to use your TTR funds for something big like a holiday, you will still need to save as they can only be paid as regular payments and not a lump sum payment. 

Alternatively, if you don’t want to slow down on the work front, you can wait until age 65 and access your super even if you have not retired.

Sorry to be the bearer of bad news, but there isn’t a superannuation preservation age loophole. But there are some circumstances where you will be able to access your super early. These include:

• Death or Terminal Illness
• Terminating gainful employment 
• Permanent Incapacity
• Severe Financial Hardship
• Compassionate Grounds
• Have less than $200 in your super fund 
• First home super saver scheme (FHSS)