Superannuation withdrawal rules

You've no doubt heard about how super is an essential part of your financial future, designed to help you build a nest egg for your retirement. What is not so widely known are all the scenarios and circumstances that entitle you to withdraw your super.

Many of us, for example, assume that our super is inaccessible until retirement, but that is not always the case. There are a range of conditions that enable you to withdraw your super early.

Here, we'll delve into those various conditions, as well as detail the process of withdrawing your super.

Superannuation withdrawal age

Your preservation age is the age at which you can access your super under normal circumstances.. As of 1 July 2024, the preservation age is 60.

Keep in mind that you can generally withdraw your super when you meet the preservation age and retire from the workforce.

When can you withdraw your super?

There are a number of circumstances where you can withdraw your super:

• Retirement – The most common method of accessing super is when you reach your preservation age and retire or, leaving employment or winding up your business after age 60 (before age 65).
• Attaining age 65 – You can access your super if you attain age 65.
• Transition to retirement (TTR) - Some people choose to access their super early through a transition to retirement strategy. If you have reached preservation age, this allows you to access a portion of your super while continuing to work. It's important to seek financial advice to determine if this strategy is right for you.
• Terminal illness - If you are diagnosed with a terminal illness, you can apply to withdraw your super. In this situation, two medical professionals need to certify that your illness is likely to result in your passing in the next 24 months.
• Severe financial hardship - If you're facing severe financial hardship, you may be able to access your super early. This typically requires proof of your financial difficulties, and you must be receiving Centrelink income support payments for a certain period at the time you apply.
• Permanent disability - If you become permanently disabled and are unlikely to work again, you can access your super early. Two medical practitioners need to certify that, because of your disability, you are unlikely to return to the kind of work you are reasonably qualified for with your education, training or experience.
• Temporary residents leaving Australia – If you are a temporary resident and have left Australia permanently, you can apply to withdraw your super. This process has specific requirements and additional tax will apply to a portion of you super.
• Compassionate grounds - In exceptional circumstances, such as major medical expenses or to prevent foreclosure on your home, you may be able to access your super on compassionate grounds. This requires approval from the ATO (Australian Taxation Office).
• First Home Super Saver Scheme (FHSSS) - If you're a first-time homebuyer, you can apply to withdraw a portion of your super under the FHSSS to purchase your first home. There are specific rules and limits associated with this scheme.