Turning 60 is the most significant milestone for most Australians when it comes to superannuation. For anyone born on or after 1 July 1964, 60 is preservation age — the minimum age to access super. And crucially, any super you withdraw after age 60 is completely tax-free, regardless of how much you take or which component it comes from.
What Changes at 60?
1. All Super Withdrawals Become Tax-Free
After age 60, you pay no tax on super withdrawals — whether you take a lump sum, start a regular income stream (account-based pension), or a combination. This applies to both the taxable component and the tax-free component of your super balance.
This is one of the most significant tax concessions in Australia’s retirement system. Before age 60, the taxable component of a lump sum is subject to tax (even if at concessional rates). After 60, there is no tax at all.
2. Retirement Condition Becomes Easier to Meet
Before age 60, “retirement” as a condition of release requires that you have permanently ceased employment and do not intend to ever again work more than 10 hours per week.
After 60, you only need to have ceased a particular employment arrangement. You may start a new job later — the condition of release remains met. This makes accessing super at 60 far more flexible than at earlier ages.
3. Transition to Retirement Option Available
If you are 60 and still working (and haven’t retired), you can start a Transition to Retirement (TTR) income stream. This lets you draw up to 10% of your super balance per year as regular income — which some people use to supplement reduced hours as they wind down to retirement.
Note that TTR earnings are still taxed at 15% within the fund (not tax-free) until you fully retire.
What Can You Do at 60?
| Situation | What’s Available |
|---|---|
| Reached 60 and retired (or ceased an employment arrangement) | Full access — lump sum and/or account-based pension, tax-free |
| Reached 60 and still working full-time | TTR income stream only (up to 10% of balance per year, no lump sum) |
| Reached 60 and work has reduced but not stopped | TTR income stream, or can access fully if you cease a work arrangement |
| Reached 60 and took a redundancy | Meets retirement condition if you don’t intend to work 10+ hours/week |
Tax-Free Withdrawals After 60 — How They Work
When you take a withdrawal after age 60, your super fund does not withhold tax. You do not need to include the withdrawal in your tax return as income. The amounts are entirely outside the income tax system.
This is different from, say, interest income or rental income — those are still assessable. Super withdrawals after 60 are a clean tax break.
Practical example: A 62-year-old who retires and withdraws $300,000 from super — either as a lump sum or as an account-based pension — pays $0 in tax on that withdrawal.
Account-Based Pension After 60
Most retirees at 60 choose to convert their super accumulation account to an account-based pension. Key features:
- All investment earnings within the pension account are tax-free (this is a significant advantage over accumulation phase, where earnings are taxed at 15%)
- You draw regular payments — monthly, quarterly, or annual
- Minimum annual drawdown is 4% of account balance for those under 65
- No maximum drawdown applies
- Remaining balance stays invested according to your chosen option
If you withdraw $500,000 as an account-based pension and earn 7% per year, those returns ($35,000 in the first year) accumulate completely free of tax within the pension account.
Lump Sum Withdrawal at 60
If you prefer a lump sum — to clear a mortgage, fund a renovation, or invest outside super — you can take a full or partial lump sum after age 60, tax-free.
Points to consider:
- Money withdrawn from super loses the tax-advantaged super wrapper — future earnings on that money are taxable
- A large lump sum could affect Age Pension eligibility via the assets test (both the amount and what you do with it may count as assessable assets)
- Super is typically creditor-protected — once withdrawn, that protection is lost
Leaving Money in Super After 60
You are not required to withdraw super at age 60. Super can remain in accumulation phase earning returns (taxed at 15% within the fund) until you choose to access it, or until you turn 75 (after which further contributions become very limited).
Many people choose to leave super untouched at 60 and draw it from 65 or 67, particularly if they are still working and have other income.
Impact on Age Pension
If you are between age 60 and 67, your super balance is not counted in the Age Pension assets test or income test if you have not yet started drawing from it. Only once you reach Age Pension age (currently 67) does the super balance become assessable under means testing.
This creates a short window where some retirees aged 60–67 who have retired early may be eligible for some Centrelink payments, even if they have a large super balance (because it’s not yet assessed). This is a nuanced area — see Super and Centrelink — How Your Super Affects Means Tests for full detail.
Frequently Asked Questions
Do I have to stop working to withdraw super at 60? No — if you turn 60 and cease any particular employment arrangement (even if you later take another job), you can access your super. You don’t need to stop all work forever. However, while you are still employed and haven’t yet ceased a work arrangement, a TTR income stream is the only option — you cannot take a lump sum.
Can I take my super at 60 and reinvest it outside super? Yes, but consider the tax implications. Inside super (in pension phase after 60), investment returns are completely tax-free. Outside super, returns are taxed at your marginal rate. For most retirees, keeping money in super (as a pension) is more tax-efficient than withdrawing and reinvesting.
I turned 60 but my preservation age was lower — did I have an earlier access window? Yes — the preservation age table applies by birth date. If you were born before 1 July 1960, your preservation age was 55, meaning you may have been able to access super at 55. But as of 1 July 2024, the scheduled age increases are complete, so preservation age is 60 for all those born after 30 June 1964.
Does my super still go into a death benefit estate if I haven’t drawn it down at 60? Yes. Undrawn super remains in your fund and passes to your nominated beneficiaries (or your estate if there is no valid nomination) on your death. It does not disappear. See your fund’s documentation on binding vs non-binding death benefit nominations.
See also: Accessing Your Super. For advice tailored to your situation, speak with a licensed financial adviser. You can find one through the ASIC financial advisers register or MoneySmart.