Accessing Your Superannuation at 60
When you turn 60, you reach your 'preservation age,' which is the earliest age you can access your superannuation. While the government Age Pension eligibility starts at 67, accessing your super earlier can be a key part of your retirement or pre-retirement financial strategy.
Condition of Release
To access your super at 60, you must meet a 'condition of release.' The most common are:
- Permanent Retirement: If you retire from your job after turning 60, you can generally access all your super savings.
- Ceasing an Employment Arrangement: For those still working but leaving an employer on or after turning 60, you can access the super you have accumulated up until that point.
- Transition to Retirement (TTR) Income Stream: If you want to reduce your working hours without reducing your income, you can use a TTR pension. This allows you to draw down a portion of your super as an income stream while you continue to work.
Tax-Free Super Withdrawals
One of the most significant benefits of reaching 60 is that any withdrawals from a taxed super fund become tax-free. This applies to both lump sum withdrawals and income streams, and is a major financial advantage for Australian seniors.
Unlocking State and Territory Seniors Cards
Another key entitlement upon turning 60 is the state or territory Seniors Card. These cards are designed to provide discounts and concessions to older Australians, encouraging them to stay active and engaged in the community. Eligibility criteria and benefits vary slightly by location.
General Eligibility and Benefits
- Eligibility: Typically, you must be 60 or over, an Australian permanent resident, and meet a working hours test (e.g., working less than a certain number of hours per week).
- Benefits: These can include concessions on public transport, discounts at participating businesses (including retail, hospitality, and services), and reduced government service fees.
Important Government Payments to be Aware Of
While the Age Pension is not available until age 67 for those born after January 1, 1957, there are other government support options available to older Australians.
Commonwealth Seniors Health Card (CSHC)
If you are of Age Pension age (currently 67) but don’t receive an income support payment from Centrelink, you may be eligible for the CSHC. This card provides concessions on medical costs and some other benefits, and is subject to an income test. Recent changes to the income threshold mean that more self-funded retirees are now eligible.
- Eligibility: Age Pension age, meet residency rules, not receiving an income support payment, and meet the CSHC income test.
Home Equity Access Scheme
This is a voluntary government loan that allows eligible Australians of Age Pension age to supplement their retirement income by using their real estate as security. The loan is paid fortnightly and is non-taxable.
Financial Planning and Contribution Strategies in Your 60s
Even if you are not yet retired, your 60s are a critical decade for optimising your financial position. Your superannuation rules change in your favour, offering a final opportunity to boost your retirement savings effectively.
Comparing Financial Benefits in Your 60s
| Benefit | Available at 60? | Key Conditions | Main Benefit | Impact on Retirement |
|---|---|---|---|---|
| Accessing Super | Yes | Must meet a condition of release (e.g., retiring, starting a TTR). | Tax-free withdrawals from a taxed fund. | Crucial for funding early retirement or supplementing income. |
| State Seniors Card | Yes (in most states) | May have part-time work hour limits. | Discounts on transport, retail, and services. | Immediate savings on daily living costs. |
| Age Pension | No | Must be 67 or over, meet income, assets, and residency tests. | Income support payment. | Provides a baseline income for older Australians who qualify. |
| Commonwealth Seniors Health Card | No (must be Age Pension age) | Must be Age Pension age, meet income test, not on Centrelink income support. | Cheaper medicines and medical services. | Reduces healthcare costs for self-funded retirees. |
Strategic Contributions to Super
If you continue to work, you can take advantage of improved super contribution rules.
- No Work Test for Contributions: If you are aged 67 to 74, you can make non-concessional and salary sacrifice contributions without having to meet the work test, subject to caps.
- Downsizer Contributions: If you sell your family home, you can contribute up to $300,000 (per person) from the proceeds into your super. The minimum age for this is now 55.
- Carry-Forward Contributions: This allows you to use unused concessional contributions caps from previous years, giving you the flexibility to make a larger contribution.
Next Steps and Resources
Your 60s mark a pivotal stage for financial planning. Understanding your superannuation options and potential concession cards is key. As your circumstances change, it's vital to stay informed and seek advice. Consider using the free and confidential Financial Information Service offered by Services Australia to discuss your options.
Conclusion
Turning 60 in Australia opens up a range of entitlements and strategic financial opportunities, particularly concerning your superannuation and eligibility for state Seniors Cards. While the government Age Pension is still some years away for most, this period allows for careful planning to maximise your financial position. By understanding your entitlements and making informed decisions, you can ensure a smoother and more comfortable transition into retirement. Consulting reliable sources like Services Australia is always recommended for the most current and personalised information.
Visit Services Australia for detailed information on government payments and concession cards.
