I’m 67 and working part-time. Should I start drawing on my super? |
I’m 67 and working part-time. Should I start drawing on my super?
April 22, 2026 — 5:01am
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I am 67 and work part-time as an emergency teacher. A colleague of mine, who like me is with AustralianSuper and also works part-time, has recently moved most of his super into a pension account. He is encouraging me to do the same, saying it will save tax on the income earned on my super, which I have not yet touched and is still in the accumulation phase. Could you explain the ins and outs of this strategy?
Every investment decision has advantages and disadvantages. If you leave your money in accumulation mode, earnings will be effectively taxed at 15 per cent within the fund, but there is no requirement to draw any money out of it.
If you move it to pension mode, the earnings will be entirely tax-free, and the income you draw from it will be tax-free. The disadvantage is you must draw a minimal annual pension, which increases as you get older – for somebody aged 67 to 74, the minimum drawdown rate is 5 per cent.
Unless you have substantial income in your own name outside super, I see no disadvantage in moving to pension mode.
I will have a super balance of more than $3 million at June 30, 2026, and I am trying to understand how the proposed additional 15 per cent tax will apply. To avoid this extra tax, when would it be best to reduce my balance below $3 million – by this June 30........