You can usually access your super or SMSF tax-free when:
- You turn 65 – No need to retire. You can access your super or Self-Managed Super Fund as a lump sum or income stream, tax-free.
- You’re 60 or over and leave a job – You can withdraw all the super you’ve built up in your Self-Managed Superfund (SMSF) to that point tax-free, even if you keep working elsewhere. This is because ceasing an employment arrangement after turning 60 satisfies a “condition of release”, allowing you to withdraw your SMSF benefits without tax implications.Example – Sonya is 61 years old and has been working at Company A for several years. She decides to resign from her position at Company A but plans to start a new job at Company B shortly after. Upon resigning from Company A, Sonya meets a condition of release due to ceasing employment after age 60. This allows her to access the Self-Managed Super Fund benefits she accumulated up to the point of leaving Company A tax-free.However, any SMSF contributions made during her employment at Company B will be preserved and can only be accessed when she meets another condition of release, such as retiring or turning 65.
- You retire after reaching your preservation age (between 55 and 60, depending on your birth year) – You can access your Self-Managed Super Fund, but some of it may be taxed if you’re under 60. The tax-free portion of your member balance won’t be taxed, but the taxable portion may be, depending on how much you withdraw and whether you take it as a lump sum or income stream.
- You’re diagnosed with a terminal illness – If two doctors certify you’re likely to pass away within 24 months, your super or member balance in your SMSF can be accessed tax-free.
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