Think about how you’ll spend your super

There’s several ways to access your super, Gayle Bryant explores which one may work for you.

While some of us may have no intention of fully retiring, there will come a time when we’re all able to access our retirement income. And as you can get to your super money in a number of ways, it’s worth knowing the options so you’re prepared when the time comes.

When can I access my super?

You can access your super when you have reached your ‘preservation age’ and retired. Once you’re 65 you can freely access your super even if you’re still working. 

Your preservation age is the minimum age you need to reach in order to access your super, and can be from 55 to 60 years old depending on what year you were born. If you were born after June 30, 1964, your preservation age is 60, but if you were born before this date it can  be earlier. 

Date of birth Preservation age (years)

Before July 1, 1960


July 1, 1960 – June 30, 1961


July 1, 1961 – June 30, 1962


July 1, 1962 – June 30, 1963


July 1, 1963 – June 30, 1964


After June 30, 1964


Source: ATO

There are several ways you can access your super:

  • you can take it as an income stream
  • a lump sum
  • a combination of both - an income stream and lump sum.

Retirement income stream

This strategy can help make your money last longer in retirement, as regular small payments are drawn down while the rest of the balance remains invested in the market. Once retired, the need for a regular income doesn’t stop. There are still bills to pay and a retirement to enjoy, so having regular income payments can help you manage household budgets and spending with more accuracy. Plus, there are some great tax advantages to consider.

First, investment earnings inside this type of pension attract no tax. To secure this tax exemption, you must withdraw a minimum amount each financial year which is dependent on your age and account balance.

Minimum annual pension withdrawal payments

Age of pension account holder % of account balance

Under 65


65 to 74


75 to 79


80 to 84


85 to 89


90 to 94


95 and above


Source: ATO

The second tax benefit is that the income payments made to those aged 60 and above are generally tax free. If you’re between the preservation age and less than 60 years old, the payments will be taxed at your marginal tax rate, less a 15 per cent tax offset.

A lump sum

You can also take your super as a lump sum or as several big withdrawals spread over time. If you choose this option, withdrawn money is no longer considered to be super money, so if you invest it any earnings gained outside super will be taxed at your marginal tax rate.

While it might be an attractive option to take your entire super balance as a lump sum so you can pay off any outstanding debts – such as your mortgage – you need to consider what you’ll live on if there’s nothing left and you have no other income generating assets. While the age pension is an option, it’s unlikely to provide you with a comfortable lifestyle.

If you do need a lump sum, one option could be to just drawn down enough super to pay down debts and start an account-based pension  with the remainder.

So which should you choose?

The best option for you depends on your circumstances. For example, an account-based pension generally suits those who have fully retired and have the flexibility to draw down at least the minimum amounts.

If you need a lump sum to pay off your debts, then drawing it out of your super might be your best approach, especially if you have assets outside super that you can use to fund your lifestyle.

If you’re nearing the time when you can access your retirement income, start discussing the different options now with your financial adviser or accountant so you can make an informed choice based on a comprehensive understanding of the pros and cons of each.

For ANZ Smart Choice Super members nearing retirement, read more information here on accessing your super to understand what options are available to you.

All case studies are hypothetical and are not meant to illustrate the circumstances of any particular individual. Taxation law is complex and this information is our interpretation of the law. It has been prepared as a guide only and does not represent tax advice. You should seek independent tax advice specific to your individual circumstances from a tax adviser or registered tax agent. Superannuation is a long term investment and the rules and regulations governing it are subject to change. ANZ recommends that you keep informed of the changes to superannuation and any potential impact any changes may have.