Key takeaways:

• The various circumstances - in addition to retirement – around which you can access your super
• The steps involved in the super withdrawal process

You've no doubt heard about how super is an essential part of your financial future, designed to help you build a nest egg for your retirement. What is not so widely known are all the scenarios and circumstances that entitle you to withdraw your super.

Many of us, for example, assume that our super is inaccessible until retirement, but that is not always the case. There are a range of conditions that enable you to access your super early.

Here, we'll delve into those various conditions, as well as detail the process of withdrawing your super.

The preservation age

The preservation age is the age at which you can access your super under normal circumstances. The preservation age varies depending on your date of birth. It ranges from 55 (for those born before July 1, 1960) to 60 (for those born after June 30, 1964).

Keep in mind that you can generally access your super when you meet the preservation age and retire from the workforce.

When can you withdraw your super?

There are a number of circumstances whereby you can obtain access to your super:

• Retirement – The most common method of accessing super is when you reach your preservation age and retire or, leaving employment or winding up your business after age 60 (before age 65).
• Attaining age 65 – You can access your super if you attain age 65.
• Transition to retirement (TTR) - Some people choose to access their super early through a transition to retirement strategy. If you have reached preservation age, this allows you to access a portion of your super while continuing to work. It's important to seek financial advice to determine if this strategy is right for you.
• Terminal illness - If you are diagnosed with a terminal illness, you can apply to access your super. In this situation, two medical professionals need to certify that your illness is likely to result in your passing in the next 24 months.
• Severe financial hardship - If you're facing severe financial hardship, you may be able to access your super early. This typically requires proof of your financial difficulties, and you must be receiving Centrelink income support payments for a certain period at the time you apply.
• Permanent disability - If you become permanently disabled and are unlikely to work again, you can access your super early. Two medical practitioners need to certify that, because of your disability, you are unlikely to return to the kind of work you are reasonably qualified for with your education, training or experience.
• Temporary residents leaving Australia – If you are a temporary resident and have left Australia permanently, you can apply to withdraw you super. This process has specific requirements and additional tax will apply to a portion of you super.
• Compassionate grounds - In exceptional circumstances, such as major medical expenses or to prevent foreclosure on your home, you may be able to access your super on compassionate grounds. This requires approval from the ATO (Australian Taxation Office).
• First Home Super Saver Scheme (FHSSS) - If you're a first-time homebuyer, you can apply to withdraw a portion of your super under the FHSSS to purchase your first home. There are specific rules and limits associated with this scheme.

The withdrawal process for accessing super 

Once you've determined that you're eligible to withdraw your super, the process begins. Here's a general overview of the steps involved:

• Contact your super fund - Start by contacting your super fund. They will guide you through the process and provide the necessary forms and information.
• Complete the application - Depending on the reason for your withdrawal, you may need to complete specific forms and provide supporting documentation. For example, if you're retiring, you'll need to prove your identity and complete the retirement declaration form.
• Wait for approval - After submitting your application, you'll need to wait for your super fund or the ATO to process your request. This can take some time, so be patient.
• Receive payment - Once your withdrawal is approved, you'll receive your super payment. This can be paid as a lump sum or in regular instalments, depending on your circumstances.
• Tax considerations - Be aware that there may be tax implications when withdrawing your super. The tax treatment varies depending on your age, the amount withdrawn, and the reason for withdrawal. It's advisable to consult a tax professional to understand your specific tax obligations.

Important considerations for withdrawing super

Before you rush into withdrawing your super, there are some important considerations to keep in mind:

• Long-term consequences - Withdrawing your super early can significantly impact your retirement savings. Consider the long-term consequences and explore other financial options before making a decision.
• Financial advice - Seeking professional financial advice is very important when contemplating early super withdrawal. A financial adviser can help you assess your financial situation and explore alternative solutions.
• Changes in legislation - Keep in mind that legislation may change in the future, so staying informed about super regulations is essential.
• Documentation - Ensure that you have all the necessary documentation and meet the eligibility criteria for your chosen reason for withdrawal.
• Tax implications - Be aware of the tax implications of your withdrawal, as this can affect the amount you receive.