Things to consider when you’re over 65 - ask an adviser

We spoke to Financial Adviser Renee Zimmermann about the things to consider when you’re aged over 65 and approaching retirement.

How long can you keep money in a super account?

You can keep your money in a super (accumulation) account as long as you wish. You don’t have to take your funds out, withdraw or commence a pension style of account, and there are pros and cons depending on your situation.

It also depends on what type of super you have. For example, if you’re a member of our Defined Benefit fund and you cease employment, there may be some important and time critical decisions you need to make.

Leaving your funds in an accumulation account means that:

  • you don’t have to make any withdrawals, even if you’ve retired
  • your balance will continue to be invested and grow over time, depending on market performance
  • your super earnings will be taxed at up to 15%, which may be higher or lower than your marginal tax rate outside of super
  • you can access these funds at any time if you meet a condition of release, such as retiring after your super preservation age or reaching age 65
  • you can retain any life insurance cover that you have, although it’s important to note that life cover may cease on factors such as age
  • you can continue to receive employer contributions. You can also make personal contributions up until age 75.

Whether or not leaving your money in super is the right option for you will depend on several things, including:

  • how much income you need in retirement
  • how much flexibility and control you want over your super
  • whether you like the idea of a regular income
  • how much you have and how long will it last
  • how much tax you’ll pay on super earnings and withdrawals
  • whether you’re eligible for the Age Pension and how it will be impacted by your super
  • how much life insurance cover you need or want.

There is no one size fits all approach to this question. You can choose to have a combination of both an accumulation account and a pension account, depending on your situation.

Are there any tax advantages for people 65 years or older?

If you’re over age 59, you may be able to start accessing your super. From age 60, any income or lump sums drawn from a taxed super fund (which most funds are) is tax-free.  This is regardless of your work status.

Reaching age 65 means you have full access to your super, even if you continue to work. If you decide to move some or all of your money to an account-based pension, any super earnings are tax free.

Why would someone access their super if they’re still working?

If you’re over 65 and still working, there may be various reasons why you might access your super – either as a lump sum or a retirement income stream.

Lump sum withdrawal: This might be used to pay off debt, fund large capital expenses like home renovations or a new car, or to fund a planned holiday.

Retirement income stream: This additional income might be used to:

  • reduce your working hours while maintaining the same net income
  • give you additional income for debt repayments or other planned expenses
  • even up your super balances if a couple
  • any income from a retirement income stream will be tax free from age 60. Any earnings within the income stream will be tax free from age 65, even if you’re still working.

What do you need to do to turn super into a pension (retirement income)?

You’ll need to apply to move your money into an account-based pension. If you’re already a member, you can log in to your online account and follow the prompts, or you can complete a Flexi Pension application form – located at the back of our Flexi Pension Product Disclosure Statement (PDF, 3.1 MB).

If you’re not yet a member of UniSuper, you’ll first need to become a member by opening a Personal Account. You can then apply the same way.

When applying, you’ll need to make decisions about:

  • how much you wish to transfer into a pension
  • what level of income you want to receive (there's a minimum that applies)
  • the frequency you would like this to be paid
  • how you want your pension invested
  • what you want to happen with your funds when you die.

What are the benefits of having a super account as well as a pension (or retirement income) account?

Keeping a super account means you can:

  • retain any insurance cover you have
  • continue to add money into super, provided you're under age 75
  • hold your funds in a tax-effective place if you don’t want to, or can’t transfer all your funds to a pension account / retirement income stream
  • improve Age Pension entitlements in some cases.

There’s a limit on the amount you can transfer to an income stream during the ‘pension phase’, known as the transfer balance cap. If you have a large balance, you might need to retain some funds in the ‘accumulation phase’.

Are there any risks with having both accounts?

You pay a fee for each account you have. Therefore, holding multiple accounts will come at a higher overall cost.

Can you have more than one retirement income account?

You can have more than one retirement income account, but there are few considerations. Each account has a minimum starting amount of $25,000. Once your balance drops below $10,000, the remaining funds will automatically be deposited to your bank account.

You'll pay an administration fee for each account you hold, so it will cost more overall to hold multiple accounts. However, for some people, holding multiple retirement income accounts might be appropriate for estate planning reasons.

How does investment performance differ for super and pension accounts?

Within 'accumulation phase', any investment returns attract up to 15% tax, whereas in ‘pension phase’, investment returns are not taxed. So, while the returns are the same, in pension phase you will not pay any tax on investment earnings and therefore receive a higher effective return.

Is it possible to return to work after retirement? What does this mean for super?

You can return to the workforce if you’ve previously retired and commenced a retirement income account. If you’re not yet age 65, any future contributions into super will be preserved (unable to be accessed) until you meet a future condition of release (i.e. you cease work again or reach age 65).

If you’re already over age 65 you can access your super and any future contributions at any time. Existing pension and super remains unrestricted if you return to work.
If you previously closed your super account when you retired, you can easily set up a new Personal Account to accept future contributions.

Is it worth getting financial advice if you’ve already retired?

Everyone’s retirement will look different and can change over time. Given the complexities around super legislation and how your super interacts with other retirement income sources—such as the Age Pension—receiving personal, tailored advice can help to reduce retirement anxiety and ensure you’re making the most of what you have, no matter what your balance is.

Professional financial advice can also increase your confidence – to help you make informed financial decisions to suit your personal situation. There might be unintended consequences you hadn’t considered before – like the tax your adult children will pay upon receiving an inheritance directly from super.

Getting retirement right means considering all available options and meeting with an adviser can raise important questions that you may not have thought to ask.


Renee Zimmermann Private client adviser

Renee Zimmermann

Private client adviser

Renee began her career in financial services in 2008. Her experience helped her to develop a strong technical background across a broad range of financial strategies. Renee is also an advocate for educating people to take control of their finances. She encourages her clients to make informed financial decisions and takes the time to explain complex strategies clearly.

Enquire online

Are you ready to talk to an adviser?

We understand this is a complex subject but there is support available.

UniSuper’s award-winning advice team can help. We’ll talk through your personal situation and the various options of support to suit your needs.

Call our team on 1800 331 685 8.30am to 6.00pm (Melbourne time) Monday to Friday or talk to one of our financial advisers.

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The information is of a general nature and doesn't consider your personal circumstances. Before making decisions, you should consider whether the information is appropriate for your circumstances otherwise seek financial advice.
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