Explore the advantages of turning 60

6 February 2024

Turning 60 is a milestone that comes with many benefits, especially when it comes to superannuation.

The rules for superannuation and tax change are more beneficial when you turn 60. Here are some of the advantages that you can look forward to.

You can start accessing your super

If you were born after 1 July 1964, your ‘preservation age’ is 60. This means when you reach 60, you can start accessing your super if you meet some conditions of release.

Anyone born before 30 June 1964 had a preservation age between 55 and 60. Preservation ages are explained on the Australian Taxation office website.

So, between the ages of 60 and 64, you can start accessing some or all of your super if you have permanently retired.

Generally, you can also start accessing a portion of your super if you have left a job at 60 or older but have not permanently retired. You can access any super earned up to that point, and any further super earned in a new job will be preserved until a further condition of release is met.

Accessing super at 60 can either be done as a lump sum or a retirement income stream, or a combination of both.

Find out more: Accessing your super

Tax-free withdrawals

One of the main advantages of turning 60 is that, if the conditions of release have been met, you can withdraw some or all of your superannuation benefits tax-free.

If you withdraw an amount of your superannuation benefit, you don’t pay any tax on the amount you receive, regardless of whether you take it as a lump sum or as an income stream. This means you can access a portion of your super without reducing your net income.

Tax-free earnings

When you fully retire after age 60, all the investment earnings and capital gains within an account-based Pension such as Brighter Super’s Pension account will be received tax-free, regardless of the amount or frequency of your payments. This means that you can enjoy a higher return with an account-based Pension.

Transition to Retirement Pension account

If you want to keep working, when you turn 60, you may be eligible to open a Transition to Retirement (TTR) Pension account. This lets you receive tax-free income from your super while you keep working, which can help you ease into retirement.

Depending on your personal situation, here are three ways that you can use this type of account:

• Top up your income as you work less or take a lower-paid position leading up to retirement.
• Continue working full-time and receive money from your super as additional income.
• Take regular income from your super and redirect part of your salary to super through salary sacrifice – depending on your salary level, this can be a tax-effective way of growing your super, if you stay under your contributions cap.

A TTR Pension account works in much the same way as a Pension account, but only the income is tax free, the earnings are not. You are unable to make lump sum withdrawals and there are limits on how much you can take out each year. When you turn 65, this account will automatically be converted to a Pension account.

Before deciding if a TTR Pension account is right for you, we recommend you seek financial advice (details at the end of this article). You should also consider any implications for your taxation situation and Centrelink entitlements.

Find out more:
Brighter Super’s Transition to Retirement Pension account

Downsizer contributions

Downsizer contributions allow eligible homeowners to contribute up to $300,000 from the proceeds of the sale of their home into their super.

In 2022, the eligibility age for downsizer contributions was reduced from 65 to 60 years. In 2023, the eligibility age was reduced further to 55 years.

This type of contribution can give people approaching retirement another option for growing their super. A downsizer contribution is a non-concessional contribution, which isn’t taxed and does not count towards the contribution cap.

For further information, including eligibility and conditions, visit the Australian Taxation Office website.

Ongoing advice and support

As you enjoy your 60s, the advantages that these tax rules provide can help you maximise your retirement savings, reduce your living expenses and improve your quality of life.

Before you make any changes to your super so close to your retirement, you should seek advice and support. Brighter Super is here to help you.

Retirement Health Check

As a first step, we offer a Retirement Health Check. This is a 30-45 minute appointment with one of our financial advisers over the phone. They can tell you if you are on track to achieve your retirement income goal.

The adviser can also give you a general overview of the different ways to grow your super. A fee of $330 applies for a Retirement Health Check and can be paid for through your super account.

Find out more in our recent article: Introducing our new Retirement Health Check service

Financial advice

If you are interested in a deeper analysis of your financial situation and future goals, you may want to seek financial advice.

If you already have a financial adviser, they can help you make informed decisions about your super.

If you do not have a financial adviser, Brighter Super’s in-house team of financial advisers is here to help you¹. Find out more about financial advice or call us on 1800 444 396 to discuss which type of advice would suit you best.