How super works in retirement
The purpose of super is to provide an income in retirement. We can help you achieve this so that you can enjoy your glory days after years of hard work.
There are several ways to use your super when you’re nearing or at retirement. Speak to one of our experienced advisers who can help you make decisions about your super for a better future.
When can you access your super?
You can access your super at any time once you turn 65. However, you can also access your super from age 57 (depending on when you were born), if you retire or you prepare for retirement by starting a transition to retirement pension.
How does super work in retirement?
As you approach retirement there are two phases in particular where you should consider reviewing your retirement strategy:
- Phase one is when you're getting ready for retirement - where you can access your super through a transition to retirement (TTR) strategy
- Phase two is when you retire or turn 65 - where you can withdraw some or all of your super or start a Retirement Pension through LUCRF Pensions.
You might also be able to access your super through a lifetime pension or annuity if you're 60 and cease employment. Lifetime pensions and annuities are offered by other providers.
Preparing for retirement using a TTR strategy
You can start a TTR strategy from age 57 (depending on when you were born). A TTR strategy might suit you if you want to:
continue to work full-time but pay less tax, or
ease into retirement gradually by reducing your work hours while still maintaining your income.
A TTR strategy typically involves salary sacrificing some of your income while accessing some of your super through a TTR Pension while you continue to work.
Retiring or turning 65
You can choose to withdraw some or all of your super from your LUCRF Super account when you:
turn 65, or
retire and reach preservation age (which starts from age 57 depending on when you were born.)
You can also consider starting a Retirement Pension with LUCRF Pensions.
The benefits of a Retirement Pension are that your savings remain invested and you’ll enjoy tax-free investment earnings. Every year you'll be paid a minimum percentage of your account balance which increases as you get older.
Our lower-than-average fees mean we have one of the most competitively priced pension products in Australia.
Payments are tax-free if you’re aged 60 or over.
Receive regular payments and make withdrawals whenever you like.
No withdrawal fees.
Super and the Age Pension
Some Australians rely on the Government’s Age Pension provided by Centrelink as their main source of income in retirement. It provides a regular fortnightly income to assist with basic costs of living.
Generally you need to be:
aged 66 or older, and
an Australian resident and living in Australia.
The government will also assess your assets and other sources of income you might have that might affect whether you’re eligible and how much you might receive.
To find out more and to claim the Age Pension, visit the Australian Government’s website here.
How does superannuation affect the Age Pension?
Your super usually forms part of the income and assets tests for the Age Pension. However, you can have a certain amount of money in your super and still be eligible for part or the full Age Pension. Speak to one of our experienced advisers who can help.
Pension products fees are sourced from the SuperRatings SMART database (1 October 2019) and compare LUCRF Super administration fees, investment fees and direct costs (net of tax) in comparison to the median fees and costs across industry, retail and government funds. Based on the LUCRF Super Balanced option and the relevant default production investment option in comparison.