By Peter Richards, Financial Advisor – Sydney
If you’re 59 or older and living in Australia, it’s time to take a serious look at your superannuation. You might not know this, but once you hit 60, a whole new set of opportunities opens up. You’ll be surprised that with a bit of planning, you may be able to achieve substantial tax savings and greater control over your finances. Let me walk you through why this matters and how you can take advantage of it.
Why You Should Care at 60 (or Even 59)
There are two big reasons this age milestone is worth thinking about:
- You can access your super
Superannuation has been locked away over your working life. But if you meet a “condition of release” after turning 60, you can start accessing those funds. Whether you want to pay off a mortgage, help your kids with a house deposit, buy a car, or just feel more secure knowing it’s there—having access to your super can be a game changer. - You can save thousands in tax
Earnings inside a super fund in accumulation phase are taxed at 15%. But if you meet a condition of release and convert your balance into a pension phase account, that tax drops to 0%.
| Super Balance | Annual Earnings (7%) | Tax @ 15% | Tax @ 0% | Annual Tax Saving |
|---|---|---|---|---|
| $1,000,000 | $70,000 | $10,500 | $0 | $10,500 |
| $2,000,000 | $140,000 | $21,000 | $0 | $21,000 |
Even if you don’t need the cash right now, converting to a pension phase account still makes sense because it cuts your tax.
How to Unlock Your Super: Conditions of Release
To access your super tax-free after 60, you need to meet a “condition of release.” There are three main ways this can happen:
- Retirement after 60
This doesn’t necessarily mean never working again. The official rule is that you don’t intend to work more than 10 hours a week in “gainful employment.” So, if you drop to say one day of paid work per week, you’re technically retired—and eligible. - Ceasing an employment arrangement after 60
This one surprises a lot of people. If you stop any job after turning 60—even a second, part-time role or consultancy—that can also unlock your super. You don’t need to leave your main job. You just need to end a valid employment arrangement that paid you superannuation.Smart strategy alert:If you’re 59 or less, consider taking on a second job or directorship now. Then if you leave it after you turn 60 it can trigger your access to your super earlier than you otherwise might.
Important:The job must pay you super and be held for a reasonable period (at least 3 months) to qualify.
- Turning 65
Regardless of your work status, once you hit 65, all your super becomes available. But if you act earlier, you could benefit from up to five extra years of 0% tax.
What About Self-Employed People?
It’s a bit trickier for the self-employed. If you’re still actively running your business, you’re considered to be working. You’d need to:
- Genuinely retire (working under 10 hours/week), or
- Take on a separate paid role (that pays super), and cease that after 60
Just cutting back hours in your own business usually won’t cut it—especially if you’re still earning profits.
Retail vs. Self-Managed Super Funds (SMSFs)
Once you’ve met a condition of release, you need to let your super fund know.
- Retail fund: Usually straightforward—fill in a form or statutory declaration confirming your retirement or cessation of employment.
- SMSF: A bit more paperwork. You’ll need trustee declarations and supporting documentation (your accountant can help with this).
Once confirmed, your preserved component becomes unpreserved, and you can either:
- Withdraw it as needed, and/or
- Convert it into a tax-free account-based pension (which is what we usually recommend for the tax savings).
What If I Don’t Need the Money?
Great! You can still draw the minimum 4% pension from your new pension account—and reinvest it in for example:
- A non-concessional contribution back into your fund
- Into your spouse’s super (for balance equalisation)
- Into your adult children’s super (especially if you’re affected by the $3 million cap rules)
It’s flexible, and we can help tailor a strategy that suits your goals.
Can I Go Back to Work After Triggering Access?
Yes—but be careful.
You can:
- Retire or cease an employment arrangement after 60
- Access and convert your super
- Later, take on a new job—even full-time
What you can’t do is pretend to retire from your current role on Friday and go back to the exact same job on Monday. That doesn’t pass the “pub test.”
Changing employers or roles is fine. The key is a legitimate cessation of a role that paid super.
Transition to Retirement (TTR) Strategy: A Side Note
You can also start a TTR pension after 60, even if you’re still working. It gives you cash flow, but doesn’t provide the tax benefits of full access:
- Your earnings inside super are still taxed at 15%
- It’s mainly used when people need money now (e.g., to pay a mortgage or fund school fees)
It’s useful, but not as powerful as the full condition of release strategy.
Some Examples
Here are a few real scenarios where clients benefited from this strategy:
- Darren (62): Changed jobs last year. He didn’t realise that switching employers triggered access. By moving $1.8 million into a pension account saves nearly $19,000 a year in tax.
- Janine (60): Took on a 6-month consulting role paying super, then ceased it. This now gives her access to the full balance of her super account.
- Michael and Sue (59): Are planning ahead. Michael is taking on a part-time board role now, which he can cease after 60. That will unlock access to his super account.
Key Takeaways
- If you’re over 60, check whether you’ve already met a condition of release
- Ceasing any job (that pays super) after 60 may give you full access
- Convert to a pension account to cut tax from 15% to 0%
- Use the income flexibly—even if you don’t need it
- Start planning at or before 59—so you can act when you’re eligible
- Get help to make sure your documentation is correct
How We Can Help
Don’t miss out on years of potential tax savings and flexibility. Whether you’re still working, recently changed roles, or planning your next move, now’s the time to explore your options.
If you’re not sure where you stand or want to take advantage of this strategy—reach out. We’re here to help you make the most of your super.
Disclaimer
People & Partners Wealth Management Pty Ltd ABN 67 127 250 613 is a corporate authorised representative of Fortnum Private Wealth Ltd ABN 54 139 889 535, holder of Australian Financial Services Licence (AFSL) No. 357 306. The content of this article is for general informational purposes only and does not constitute personal financial advice. It does not take into account your individual objectives, financial situation, or needs. Any advice we provide will be detailed in a formal advice document. The opinions expressed in this article are those of the authors at the time of writing and should not be taken as a recommendation to act. To the extent permitted by law, Fortnum Private Wealth Ltd and its associates accept no liability for any loss or damage incurred as a result of reliance on this communication.
