Preservation Age:

What you need to know

Preservation age is a term that is used to denote the age at which you can access your superannuation funds without penalty.

It is one of the conditions of release set by the Australian Tax Office (ATO) in relation to superannuation.

The common conditions of release (of which at least one must be met) are:

  • reaching preservation age and retiring
  • reaching preservation age and beginning a transition-to-retirement (TTR) income stream
  • leaving employment on or after the age of 60
  • aged 65 years (even if not planning to retire)
  • when you die

As is usually the case, there are other special conditions of release which may apply in situations of financial hardship, incapacity, medical misfortune and more – these are outlined on the ATO website. Such conditions may at least allow a partial release of super savings.

By far the most common reason for access to super is the member having reached preservation age and/or retiring. Preservation age depends upon your date of birth. The following table shows how this works:

Date of birth Preservation age
Before 1 July 1960 55
1 July 1960 – 30 June 1961 56
1 July 1961 – 30 June 1962 57
1 July 1962 – 30 June 1963 58
1 July 1963 – 30 June 1964 59
After 30 June 1964 60

In shorthand, this means that the current preservation age is 58 – and will be 60 in 2024.

As noted above, those who are aged 65 and over are exempt from the rules of preservation age, whether working or not.

How to withdraw funds

If you are retiring and have met a condition of release you can generally take your super as a lump sum or income stream.

Members of funds who reach preservation age and plan to continue working may wish to consider a transition to retirement (TTR) income stream which will allow access to regular payments from their fund. There are specific rules governing such withdrawals, including a maximum annual payment rate of 10% per financial year.

The rules for those aged 65 are much more generous.

You can withdraw as much as you wish, in an income stream or lump sum or leave your savings within your fund for as long as you like. It is only if you pass away that these funds will need to be paid out.

Whilst this overview offers a very brief explanation of the rules attached to preservation age, the exceptions are important and so you may need to seek extra information and support if your needs vary from those covered above.

Accessing superannuation is a big deal. Apart from a family home for those fortunate enough to have one, your super is likely to be your biggest asset. It is critical that you fully understand all the rules specific to your preservation age, and that you time any drawdowns to maximise your income.

Separately, but just as important, is the way you balance any lump sum withdrawals versus creating income streams – as well as the type of income stream that will best suit your needs.

And then there are entitlement considerations and ways of maximising income by considering a spouse’s age and their retirement needs, when combined with yours.

If you would like support to weigh up all of these factors and to project how long your super will last after you reach preservation age or retirement, we’re here to help. A tailored financial advice consultation will allow our adviser to handle all your superannuation drawdown questions, help you time your actions according to your preservation age and to calculate your money longevity using our Retirement Forecasting tool during the meeting.

Book a consultation