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Preservation Age Increasing

Amanda Varidel

Whilst we have known for a number of years that the superannuation

preservation age is due to increase to age 60, the change is finally upon us.


Clients born on or after 1 July 1960 will be subject to an

increase in their preservation age. For example, a client born

on 1 July 1960 will have a preservation age of 56. This means

they will not reach their preservation age until 1 July 2016.


The preservation age increases by one year for every year that a

client’s birthday is after 1 July 1960, with those born on or after

1 July 1964 having a preservation age of 60.


See table below.


PRESERVATION AGE


Before 1 July 1960 - 55 Years of Age

From 1 July 1960 to 30 June 1961 – 56 Years of Age

From 1 July 1961 to 30 June 1962 – 57 Years of Age

From 1 July 1962 to 30 June 1963 - 58 Years of Age

From 1 July 1963 to 30 June 1964 – 59 Years of Age

On or after 1 July 1964 – 60 Years of age


The increase in preservation age impacts a number of important

superannuation strategies, including:


• Transition to retirement condition of release

• Retirement condition of release

• Severe financial hardship condition of release

• Taxation of superannuation withdrawals – low rate cap of

$185,0001 applies to withdrawals between preservation age

and 60

• Taxation of superannuation income streams – 15% tax offset

applies to income stream payments between preservation

age and age 60

• Splitting contributions – the members spouse must be

under preservation age at the time of the split or if between

preservation age and 65, must declare they do not satisfy

the retirement condition of release.

Heart Retiree.jpg

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Stu Varidel AR 324007 and Your Choice Financial Planning Pty Ltd ABN 80124246877 trading as Heart Financial Advisers CAR 323623 are authorised representatives of Sentry Financial Services Pty Ltd ABN 30 113 531 034 & AFSL 286786.

Warning The information provided on this website has been provided as general advice only. We have not considered your financial circumstances, needs or objectives and you should seek the assistance of your Adviser before you make any decision regarding any products mentioned in this communication. Whilst all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly neither Heart Financial Advisers and Heart Mortgage Services nor its related entities, employees or agents shall be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information.

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