How does super work in retirement?

There’s no set retirement age in Australia – you can finish work whenever it feels right for you, as long as you have the financial means to cover your lifestyle and living costs. But your super isn’t something you can access whenever you like. There are rules – known as ‘conditions of release’ – that determine when and how you can access it.

Access to super is very limited.

You may only be able to access your super in specific, tough circumstances — like if you’re diagnosed with a terminal illness or meet criteria for financial hardship.

Your access to super depends on whether you’re still working.

You may be able to access your super if you have:

• Left a job

• Declared yourself permanently retired (not planning to work more than 10 hours per week again)

• Been diagnosed as permanently incapacitated or terminally ill

You can access your super – whether you’re working or not.

You can leave your money invested and take it out when you need it. You might choose to take smaller withdrawals over time – whatever suits your needs.

You can also explore opening a pension account, which pays you a regular income into your bank account.

You may become eligible for the government Age Pension.

Whether you get a full, part, or no pension depends on your income and assets. Centrelink will assess your situation to work this out.

If you don’t need to dip into your super right away, you can leave it invested. It will keep growing in a tax-effective environment.

It’s worth planning your withdrawals carefully – taking out large amounts too early can mean you run out of money later.

Here’s how tax works on super withdrawals:

• Before age 60: Withdrawals are usually taxed.

• After age 60: Most withdrawals are tax-free – whether you take a lump sum or regular income.

• While your super's still growing: Any investment earnings in your account (while it’s still in the accumulation phase) are taxed at up to 15%, which is generally lower than most personal tax rates.

Accessing your super is just one piece of the puzzle – it often interacts with other income sources too.

• Other savings or investments: You might choose to combine your super with other financial resources. Just note: super is usually taxed more favourably than money held outside of it.

• The Age Pension: Your super balance and how much you withdraw can affect your eligibility for the  Age Pension once you hit pension age (currently 67). Centrelink looks at your assets and income.

• Part-time work in retirement: Retiring doesn’t have to mean quitting work altogether. You might choose to keep working less than 10 hours a week, casual or part-time.  

The transfer balance cap limits how much of your super you can move into a tax-free retirement pension. The general cap is currently $2 million (as at 1 July 2025) and is periodically indexed in line with CPI. You can still keep additional savings in super, but anything above the cap must stay in accumulation, where earnings are taxed at up to 15 percent. The ATO tracks your personal transfer balance, so it’s important to check your position when you are ready to retire.

1.     Check in regularly: Review your super balance and how it’s tracking against your income goals. Big life changes – like a career move, major health shift or big expense – can all be good reasons to update your plan.

2.     Review your investments: As retirement gets closer, make sure your investment mix still reflects your comfort with risk, and your time horizon.  

3.     Stay updated: Super rules change. Stay informed through trustworthy sources like Verve Super and the ATO.

4.     Plan for longevity: As many of us will live 20-30 years beyond retirement age. It’s worth planning for the long haul.

5.     Get support: Verve Coaches or a licensed financial adviser can help you tailor a retirement strategy that fits your needs – now and into the future.

Retirement planning isn't ‘set and forget’. It evolves with your life – and the rules. Our Verve Coach team is here to support you in building a retirement strategy that balances your income needs and long-term savings goals.

Please note that Verve Super does not offer an account-based pension or transition to retirement pension product.