You have worked hard and saved hard to fund your retirement. Now you’re ready to retire, you need to decide the best way to manage your super.


Basically you have three options for your super
when you retire:

  • take it as a lump sum
  • keep it in super, and 
  • both - keep some in super and withdraw some.

Remember – what is right for you depends on your individual circumstances. If you don’t know what to do, you can contact Telstra Super Financial Planning.


Your options at retirement

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  1.  Taking your super as a lump sum

    It may be tempting to withdraw part or your entire super balance on retirement to either manage your money yourself or make a big lifestyle purchase – or both. A large amount of money can be enticing, but you need to think realistically about your ability to manage a large sum and how long that money needs to last; visit How much super is enough? for more information.

    There are risks to withdrawing your super as a lump sum:

    • the money you take out as a lump sum is no longer considered to be super,
      so if you invest the money, any investment earnings will be taxed at your marginal tax rate,
      compared to 15% if it is in super, and 0% if you are in a retirement income stream
    • if you decide to cash out your super and then later change your mind, putting it
      back in can be difficult and comes with restrictions
    • if you begin withdrawing your super before you turn 60, you may have to pay tax
      on all or part of it.

    If you are considering withdrawing your super in a lump sum, please call us on 1300 033 166 between 8.00am and 5.30pm (Melbourne time), Monday to Friday to discuss your options.

  1.  Keeping your money in super

    Once you retire, you don’t have to move your money out of super – in fact, it can be a very smart move to stay with us. Depending on your circumstances, you may wish to keep some or all of your super benefit in an accumulation account (such as Telstra Super Personal Plus or Telstra Super Corporate Plus).

    Keeping your money in your current super fund
    By keeping your money in the super account you use to build up your savings:

    • you can avoid the stress of managing what could be a substantial lump sum
    • the money continues to work for you and earn investment returns
    • your money will remain in a tax friendly environment while you decide what to do.

    Using your super for a retirement income
    Retirement income streams such as (Telstra Super RetireAccess®) qualify for tax concessions and can only be purchased with money from super.

    Some advantages of retirement income streams are:

    • the investment earnings are tax-free
    • income payments are tax-free for persons 60 or over
    • it continues the traditional form of regular payment
      that you’ve had throughout your working life.


    So – super or a retirement income stream?

    You need to decide if the benefit of not taking an action is better than the tax savings that a retirement income stream can give you.

    Some other considerations when making your decision:
    • by splitting your money between an accumulation arrangement and a retirement income stream you can have a lower income stream balance and therefore a lower minimum annual income payment requirement, which may be advantageous if you are wanting to draw down your super more slowly
    • you may be able to re-contribute what you have to take out as a minimum income payment
    • if you are aged between preservation age and age 60, you may be entitled to a 15% tax-offset on your income stream payments.

    Telstra Super RetireAccess
    Telstra Super offers a retirement income stream, Telstra Super RetireAccess. If you have any questions about this option or would like more information, call us on 1300 033 166 or request an appointment online.

     further details on the benefits of retirement income streams and how they work can be found on the Retirement income stream pages.

  1.  Both - keep some in super and withdraw some

    At retirement you can make the choice to withdraw your super, keep it in your current fund or take up a retirement income stream (like Telstra Super RetireAccess), or a combination of both. The great thing about opening a retirement income stream through Telstra Super is that you stay in control and keep plenty of flexibility.


    • you have the ability to select how much income you receive as well as how
      often you receive your money (subject to government minimum limits)
    • you still have the option to make lump sum withdrawals from your account at any
      time now that you are retired. Even better, these withdrawals are completely
      tax free if you are over 60
    • if you change your mind at any stage, you can move your money out of a retirement
      income stream and back into Telstra Super Personal Plus.

Tax on super withdrawals

You have worked hard and saved hard to fund your retirement. Now you’re ready to retire, you need to decide the best way to manage your super.

Once you turn 60, any money taken from your super becomes tax-free (provided your super is from a taxed source). If you’re under 60, the following tax rules apply:

Age Tax on taxable component
 of your lump sum
Tax on non-taxable component of you lump sum
60+ Nil Nil
Preservation age - 59 First $195,00 tax-free. Amounts above $195,000 taxed at 15% (plus the Medicare levy) Nil
Under preservation age 20% (plus Medicare levy) Nil

                  Not including the Temporary Budget Repair levy