Did you know that the preservation age is on the rise?
This is important to know what this will be for individuals reaching 50 to 60 years of age. This is especially important for SMSF trustees to know their preservation age so that they do not accidentally pay benefits to members who are not eligible.
Aside from a few limited circumstances where one can access their super funds early, such as specific medical conditions or severe financial hardship, individuals generally access their own super when they are retired.
The preservation age is not to be confused with pension age.
The preservation age is the age at which you can access your super.
The preservation age is increasing for those born on or after 1 July 1960. The preservation age is now based on an individual’s birthday.
|Date of birth||Preservation age|
|Before 1 July 1960||55|
|1 July 1960 – 30 June 1961||56|
|1 July 1961 – 30 June 1962||57|
|1 July 1962 – 30 June 1963||58|
|1 July 1963 – 30 June 1964||59|
|From 1 July 1964||60|
Source: ATO website, Accessing Your Super
A member with an SMSF must reach their preservation age before the SMSF can pay the transition to retirement income stream (TRIS).
So for SMSF members who turn 55 years old between 1 July 2015 and 30 June 2016 must wait until the 2016-17 financial year to start a TRIS.
For more information on the preservation age rise for SMSFs, visit this ATO page.