Returning to work after accessing your super
Retirement isn’t necessarily a permanent thing. Even the best-laid plans can need to be adjusted when circumstances change.
The Australian Bureau of Statistics has found the most common reasons retirees return to employment are:
- financial necessity (ie poor investment returns, financial emergency); and,
- boredom (there is only so much golf you can play!).
But what does this mean when you have already advised your superannuation fund that you have retired and started a pension or withdrawn funds? Are you locked into retirement?
Accessing your superannuation funds without incurring tax
Individuals can access their superannuation tax free under one of two retirement scenarios:
- When you turn 60 and ‘retire’ or ‘cease an employment’. For example, if you have two jobs and leave one of the jobs when you turn 60 – even if it is not a significant job – then you qualify to access your superannuation.
- When you turn 65. You don’t have to actually retire (cease work) to get full access to your super savings once you’re 65 or over.
Returning to work after retirement …
Note: One of the ATO’s concerns is people’s early access to superannuation: some people ‘retire’ in order to access their superannuation, even though they have no genuine intention of actually retiring. They then return to work very quickly – usually with the same employer and have full access to their super. This is not a genuine retirement.
The following information applies to genuine retirement.
So, you have retired but now want to return to work? Depending on your circumstances, there are rules regarding how you can return to work after retirement.
Once you are over 60, ceased employment arrangement and commenced accessing your superannuation, you are able to work in a new position as soon as you like. You can still access the superannuation funds that were available to you when you retired (i.e. you don’t need to stop your superannuation pension). Any future contributions into the funds (after you go back to work) are not accessible until you either cease employment again or turn 65.
When you turn 65, you don’t have to be retired or satisfy any special conditions to get full access to your super savings. This means you can continue working in the same role or return to work (if you have previously retired) and draw money from your superannuation fund. If you are still working after 65, your employer will still be required to contribute superannuation into your super-fund and you can withdraw this at any time.
As returning to work after retirement and continuing to receive super is circumstantial, individuals considering their options should consult their accountant or financial advisor for information specific to their situation.
Not sure how this applies to you? Call us to have a talk.