Can you work and draw down super at the same time?

This article is for general information only and does not constitute financial advice. Superannuation rules are subject to change. Please consult a licensed financial adviser before making decisions about your super or retirement income.

It is one of the most common questions from Australians approaching their late 50s and 60s: if I am still working, can I access my super? The short answer is yes, in certain circumstances. The longer answer requires understanding which rule applies to your situation.

The short answer by age

The rules differ significantly depending on how old you are and whether you have met a condition of release. Here is a plain-English summary:

• Under preservation age: In most circumstances, no, your super is preserved and cannot be accessed unless you meet a specific early-release condition (severe financial hardship, terminal illness, etc.)
• At preservation age, still working: You can access a limited income stream through a transition to retirement arrangement — up to 10% of your account balance per year. You cannot take a lump sum.
• Age 60 or over, ceased one employment arrangement: You can access the super you had at the point of ceasing that job as a lump sum or income stream, even if you then take another job. This is a genuine and commonly used pathway.
• Age 65 or over: Full access to your super regardless of whether you are working. No conditions apply.

The age 60 rule in practice

The age 60 rule is worth understanding in detail because it is more flexible than many people realise. If you are 61 and leave a full-time role to move to a part-time consulting arrangement, you have met the condition of release, you ceased an employment arrangement after age 60. The super accrued up to that point is fully accessible.

This does not mean you are required to access it. Many people who are eligible to draw on super choose not to, allowing their balance to continue growing in a tax-advantaged environment. Eligibility and the decision to draw are separate questions.

Working part-time and drawing super

One of the most common scenarios among Next50 members: reducing to part-time work and supplementing income with superannuation to maintain a similar standard of living.

If you have met a condition of release, typically age 60 or above and having ceased one employment arrangement, you can establish an account-based pension that pays a regular income stream from your super while you continue to work part-time. The employer super contributions on your part-time earnings continue to accumulate separately.

The minimum drawdown rates for an account-based pension, which determine how much you are required to withdraw each year are set by the government and change with age. ASIC’s MoneySmart has a clear guide to how account-based pensions work.

The tax picture

From age 60, income drawn from a taxed super fund as an account-based pension is tax-free. This has a material effect on your overall tax position when you are also earning employment income, your super pension income does not push you into a higher tax bracket.

Before age 60, the tax treatment is more complex and depends on your balance components. Your fund can advise on the tax treatment of your specific balance.

What to watch out for

• Drawing super down too quickly relative to your life expectancy is the primary risk — it is worth modelling how long your balance will last at different drawdown rates
• The interaction between super income and Centrelink entitlements — once you reach Age Pension age, your super balance and income stream are assessed under the means test
• The Centrelink income and assets test is worth understanding before making drawdown decisions if you expect to be near the threshold

The goal is not to minimise your super balance — it is to make it work for the life you want, for as long as you need it to.

ASIC’s retirement income estimator and the ATO’s super tools are both useful for building a basic picture before seeking personalised advice.