Super in your 60s. It’s still not too late

4 Oct 2021

Are we there yet?

For most Australians, their 60s is the decade that marks retirement. For some this means stepping into a fulfilling life of leisure, enjoying the fruits of a lifetime of hard work. However, for many it means a substantial drop in income and living standards. So how can you make the most of the last few years of work before retirement?

Are we there yet?

Allowing for future age pension entitlement the Association of Superannuation Funds of Australia (ASFA) calculates that a couple will need savings of around $640,000 at retirement to maintain a ‘comfortable lifestyle’[1]. ASFA equates ‘comfortable’ to an annual expenditure of $62,828 for a couple.

How are we tracking as a nation?

According to ASFA figures, in 2015-2016, 50% of men aged 60-64 had super balances of less than $110,000. For women the figure was a more alarming $36,000.

Last minute lift

If your super is looking a little on the thin side there are a few ways to give it a boost before retirement.

  • Make the most of your concessional contributions cap. Ask your employer if you can increase your employer contributions under a ‘salary sacrifice’ arrangement. Alternatively, you can claim a tax deduction for personal contributions you make. Total concessional contributions must not exceed $27,500 per year, although from July 2018 certain individuals have been able to carry forward any unused portion of this cap for up to five years.
  • Investigate the benefits of a ‘transition to retirement’ (TTR) income stream or retirement income stream. This may be able to be combined with a re-contribution strategy that, depending on your marginal tax rate, can give your retirement savings a significant boost and also tax concessions to you and your non-dependent death beneficiaries.
  • Review your investment strategy. A common view is that as we near retirement our investments should be shifted to the conservative end of the risk and return spectrum. However, in an age of low interest rates and longer life expectancies, some growth assets may be required to provide the returns that will be necessary to support a long and comfortable retirement. However, be aware that growth assets will be subject to greater volatility.
  • Make non-concessional contributions. If you have substantial funds outside of super it may be worthwhile transferring them into the concessionally taxed super environment. From 1 July 2021 you can contribute up to $110,000 per year, or $330,000 within a three-year period if certain requirements are met. A work test applies if you are over 67.
  • The 60s is often a time for home downsizing. This can free up some cash to help with retirement. The ‘downsizer contribution’ allows a couple to jointly contribute up to $600,000[2] to superannuation, without it counting towards their non-concessional contributions caps.

Bye-bye tax, hello aged pension?

One reward, just for turning 60, is that any withdrawals from your super account will generally be tax-free. This applies to both lump sum withdrawals and income stream payments. Depending on the preservation status of your funds you may need to meet a condition of release to access your superannuation.

Based on your date of birth, somewhere between age 65 and 67 you’ll reach age pension age. The age pension is subject to both an assets test and an income test and some advanced planning can boost your eligibility for the pension. For example, the family home is exempt from the assets test. Releasing cash by downsizing may reduce your eligibility for the age pension.

Get it right

This important decade is when you will be making key decisions that will determine your quality of life in retirement. Those decisions are both numerous and complex.

Quality, knowledgeable advice is critical, and wherever you are on your path to retirement, now is always the best time to talk to your licensed financial adviser.


*The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional. 
We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.