New reports confirm that only four in ten Australians are aware of when they can access their superannuation savings. This startling finding comes from a recent Vanguard survey that highlights a critical gap in financial literacy that could affect millions. If you’re unsure about your superannuation access, here’s what you need to know NOW.
Preservation Age: Unless you qualify for early access, your superannuation savings remain untouchable until you reach your preservation age, which varies between 55 and 60 years based on your birth date. Check your eligibility below:
– Born before 1 July 1960: Preservation Age 55
– Born 1 July 1960 – 30 June 1961: Preservation Age 56
– Born 1 July 1961 – 30 June 1962: Preservation Age 57
– Born 1 July 1962 – 30 June 1963: Preservation Age 58
– Born 1 July 1963 – 30 June 1964: Preservation Age 59
– Born after 30 June 1964: Preservation Age 60
Importantly, you do not have to retire to access these funds. At preservation age, you can choose to retire and gain full access to your superannuation. Moreover, if you’re 60 years or older and working multiple jobs, you can stop one job while keeping your other, allowing full access to your accumulated superannuation benefits.
According to the Australian Taxation Office (ATO), “If a member who is 60 years or over ceases one employment arrangement but continues in another, they may cash all benefits accumulated up to that time.” This flexibility is crucial for many Australians as they navigate their financial futures.
For those who wish to remain employed at preservation age, a transition-to-retirement (TTR) income stream is available, enabling partial access to superannuation. This option is particularly appealing for individuals transitioning to part-time work, allowing them to supplement their income.
At age 65, the rules surrounding preservation become irrelevant. Regardless of your employment status, full access to superannuation savings is granted.
Financial experts are observing a shift in retirement trends. Hamish Landreth, Director of Financial Services at Prosperity Advisers Group, notes that many clients choose to continue working past their preservation age. He stated, “The financial benefit is certainly a big driver, but there are also personal and social reasons to work longer than perhaps the generation prior.”
With the average retirement age in Australia now around 63.8 years—up from 57.3 years for earlier generations—many Australians face a gap of up to seven years between their superannuation preservation age and the Age Pension age. The Age Pension age ranges from 65 to 67 years depending on your birth date, with the full pension currently set at $1,178.70 per fortnight for singles and $1,777.00 for couples.
As many Australians grapple with their financial futures, understanding superannuation access is more crucial than ever. The need for clarity in these financial matters is urgent, especially with the rising number of retirees in Australia.
Stay tuned for more updates on financial literacy and superannuation access as authorities continue to address these pressing issues.
