Published on 13 May 2025
As a business owner, you’ve probably wondered, “When can you access your super?” Knowing the rules around your super fund is essential for planning your future. Many business owners find the eligibility criteria confusing, especially with recent changes to preservation age and the different ways to access super. This article will help you understand the rules, so you can make informed choices about your retirement income and financial wellbeing.
Understanding Preservation Age and When You Can Access Your Super
One of the first things to know is your preservation age, which is the minimum age you need to reach before you can access your super. The preservation age depends on your date of birth. For anyone born after 30 June 1964, the preservation age is now 60. This is different from the pension age for the Age Pension, which is currently 67.
Your preservation age is important because it sets the earliest point you can generally access your super benefits. You’ll need to meet certain eligibility requirements before you can withdraw money from your super account, even after you reach your preservation age.
How Your Birth Date Affects Your Preservation Age
If you were born before 1 July 1960, your preservation age was 55. For those born between 1 July 1960 and 30 June 1964, the preservation age gradually increases from 56 to 59. Everyone born after 30 June 1964 has a preservation age of 60. Once you reach your preservation age, you may be able to access your super, but you’ll still need to meet other rules before you can make withdrawals.
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Conditions That Allow You to Access Your Super
Reaching your preservation age is only part of the story. You also need to meet a condition of release before you can access your super fund. These conditions are set by the Australian Taxation Office and apply to all super accounts, including self-managed super funds.
Retiring After Reaching Preservation Age
If you have reached your preservation age and are permanently retired, you can access your super. This means you have stopped all employment arrangements and don’t intend to return to work. You can then choose how to receive your super benefits-either as a lump sum withdrawal, a regular income stream, or by opening a retirement income account.
For business owners, retiring might mean selling your business, transferring ownership, or stepping away from day-to-day management. Once you are permanently retired and meet the eligibility criteria, you can access your super and start planning your next steps.
Access at Age 65
Once you turn 65, you can access your super without having to retire or meet any other eligibility requirements. At this age, you have full access to your super fund, whether you’re still working or not. This gives you flexibility to decide when and how you want to use your super money.
Transition to Retirement: Accessing Super While Working
If you reach your preservation age but want to keep working, you can start a transition to retirement income stream. This lets you access part of your super as regular income payments while you continue to work. You can withdraw up to 10% of your super balance each year through this type of account-based pension, which can help you reduce your working hours without reducing your income.
This option can be particularly helpful for business owners who want to slow down but aren’t ready to fully retire. It’s also a way to top up your income while still contributing to your super fund.
Early Release of Super: Limited Circumstances
Super is designed for retirement, but there are limited circumstances where you may be able to access your super early. These include severe financial hardship, compassionate grounds, terminal illness, and permanent incapacity.
Severe Financial Hardship
If you’re experiencing severe financial hardship, you may be able to access your super early. To qualify, you need to have received eligible income support payments from the government for a continuous period of at least 26 weeks and be unable to meet reasonable and immediate living expenses. If you meet these requirements, you can make one withdrawal of between $1,000 and $10,000 in any 12-month period. The money you withdraw is generally taxed as a lump sum, so it’s important to consider the tax implications.
Compassionate Grounds
You may be able to access your super on compassionate grounds if you need money for certain expenses. These include medical treatment for yourself or a dependant, medical transport, paying for home or vehicle modifications due to disability, or to prevent foreclosure on your home. The Australian Taxation Office assesses applications for compassionate grounds, and you’ll need to provide evidence of your situation and expenses.
Terminal Medical Condition and Permanent Incapacity
If you have a terminal medical condition, you can access your super early. This requires certification from two medical practitioners that your illness is likely to result in death within 24 months. Similarly, if you’re permanently incapacitated and unable to work in a job you’re qualified for, you may be able to access your super. In both cases, payments are generally tax free if you meet the eligibility criteria.
Tax and Your Super: What You Need to Know
Understanding how tax applies to your super is important. If you access your super after age 60, most lump sum withdrawals and income payments from your retirement income stream are generally tax free. This makes waiting until you reach your preservation age or turn 65 a tax-effective way to access your super.
If you access your super early due to severe financial hardship, compassionate grounds, or a terminal illness, different tax rules may apply. It’s a good idea to check the ATO website or seek personal advice to understand how tax will affect your super withdrawals.
Other Ways to Access Your Super
There are a few other ways you might be able to access your super, depending on your circumstances.
If you’re using the First Home Super Saver Scheme, you can access some of your super to help buy your first home.
If your super fund includes insurance cover, you may be able to access your super if you make a successful claim for total and permanent disability or income protection.
It’s important to check your super fund’s rules and the eligibility requirements for each option.
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Conclusion
Knowing when you can access your super is a key part of planning for your retirement. Whether you’re thinking about retiring, considering a transition to a retirement income stream, or facing financial hardship, understanding the rules helps you make the best choices for your future. Remember, most super benefits become available once you reach your preservation age and meet a condition of release, but there are also limited circumstances where you can access super early.
If you’re unsure about your options or want to make the most of your super fund, our team is here to help. We can provide personal advice tailored to your situation, so you can feel confident about your retirement plans. Reach out to us for support, and let’s make sure your retirement income is working for you.
