Can I withdraw my super and keep working?
You can return to work post-retirement, but there some rules that you need to understand and follow for working in Australia
Can you return to work after you've retired and accessed your super?
The good news is that, yes, you will usually be allowed to return to work after retiring and accessing your super benefits. Even if you’ve taken a lump sum super payout or are receiving ongoing payments from your super fund, you still have the right to rejoin the workforce. However, depending on your age, you may need to prove that your personal circumstances have changed, and that you are required to return to work.
Returning to work if you're aged under 65
You're free to retire from the workforce at any age, but if you want to access your super you must also have reached your preservation age. The preservation age for Australians born before 1 July 1960 is 55 years old, while anyone born on or after this date has a preservation age of between 56 and 60. You can check your preservation age from the table below.
|Date of birth||Preservation age|
|Before 1 July 1960||55|
|1 July 1960–30 June 1961||56|
|1 July 1961–30 June 1962||57|
|1 July 1962–30 June 1963||58|
|1 July 1963–30 June 1964||59|
|From 1 July 1964||60|
If you've reached your preservation age and want to retire and access your super, you need to declare your genuine intention to retire and never work again. Most super funds require you to sign a declaration when you retire, stating that you never again intend to be gainfully employed. gainfully employed is considered working for more than 10 hours a week.
However, if your retirement savings take a hit or you decide you miss the independence and social connectedness of working, you can return to work. You can also do this while still accessing your super. You might need to prove to the Australian Taxation Office (ATO) that your intention to retire was genuine and that you didn’t plan to return to work all along.
Returning to work if you're over 65
Turning 65 is a condition of release for superannuation, which means you can access your super regardless of if you're working or not. You only need to be retired if you want to access your super before you turn 65.
If you're over 65, retired and accessing your super you can decide to rejoin the workforce at any time, for any reason.
If I return to work after retirement, how much can I earn?
There's no limit to how much you can earn if you return to work after retirement.
However, once you return to work and earn more than $450 a month, your employer will be required to make superannuation contributions at the current rate of 11% into your super fund.
And, if you're over the age of 67 you will need to complete a work test requirement if you intend to make any voluntary contributions into your super fund. These are contributions you make yourself, not those that your employer is required to make for you. To pass the work test you need to prove you've been employed for more than 40 hours in a 30-day period during the year.
Once you reach age 75 you can still work however no super contributions can be made.
What happens to my account-based pension?
If, when you retired, you had the genuine intention of retiring permanently, your super fund would have been released, allowing you to begin a super pension (or take a lump sum payment). If your circumstances change and you return to work, this account-based pension can continue to be paid.
This is because the pension contains unrestricted, non-preserved super benefits, which can be accessed at any time as long as you satisfy the rules of the super fund and the pension itself. Ask your super fund, financial adviser or the ATO for information on your specific circumstances and how returning to work could affect your account-based pension.
It’s also important to be aware that there's a $1.6 million balance cap on pension income streams. If your pension balance remains under this cap, your pension remains tax free. But if you exceed the cap, penalty tax applies to the amount over the limit.
Will I be forced to stop working when I reach my preservation age?
No, you will not be forced to stop working on your 60th birthday! You're entitled to keep working as long as you'd like, and once you turn 65 you're entitled to access your super benefits while still working. The preservation age is for those who wish to stop working, and access their superannuation.
What are the rules of superannuation when you retire?
The rules of superannuation in Australia when you retire can be quite detailed, but here's a simplified overview:
- Accessing super. You can access your super upon reaching your preservation age (between 55 and 60), usually when you declare retirement.
- Withdrawal options. You have the option to withdraw your super as a lump sum or start an account-based pension for regular income.
- Tax considerations. Withdrawals might be taxable if you're under 60. Over 60, they're generally tax-free within certain limits.
- Working post-retirement. You can work after retirement, with certain earnings exempt from affecting your pension due to the work bonus.
- Age Pension impact. Your super can affect your eligibility for the Age Pension, with specific income and assets tests applied.
- Contribution limits. Contributions to your super can continue until age 75, requiring a work test after 67.
- Minimum drawdown. If you opt for an account-based pension, there are minimum drawdown rates based on your age.
- Death benefit. Your super balance can be transferred to your dependents or estate, often tax-free for dependents.
It's important to stay updated with the latest superannuation rules or seek advice from a financial advisor.
What are the benefits to returning to work after retirement?
- Greater sense of purpose and direction
- Opportunity to try new jobs and industries
- Extra income to supplement your super
- Keeps your mind active
- Teaches skills to the younger generation
- Good opportunity to socialise and meet new people
If you haven't yet reached your preservation age but you need to access your superannuation, there are situations when you can access it early. Read our guide to early release of superannuation for all the details.
For more information on entering the work force again after retirement, check out the Department of Education, Skills and Employment website, which provides more information around opportunities, skills upgrade and career transitions and more.
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