Making super contributions after age 60: Even in retirement

As birthdays roll by beyond age 60, the focus on making sure you’ve accumulated enough super intensifies. Many people begin to notice the attraction of tax-deductible super contributions and the advantages of holding investments in super, particularly in income streams, and rush to build their balance.

If that’s you and you have some cash to spare, you may be interested in topping up. So, what are the rules on making contributions when you’ve reached 60, and what if you’re no longer working?

Why add to your super after retiring?

Contributing to super beyond 60 comes with all the tax benefits of super and very little of the downside of losing access to your money that can hold back younger people from adding voluntary savings.

Some people can also improve their (or their spouse’s) Centrelink benefits by moving savings into the system.

Unrestricted access to super is available at 60 if you have permanently retired or if you have left an employer after your 60^th birthday. If you don’t meet those conditions, you can still access up to 10% of your balance per year with a transition-to-retirement pension.

When you turn 65 your whole super balance is available to withdraw as a lump sum, income stream or combination of the two, no matter your work status.

Tax and social security benefits

Investment earnings and contributions to super are taxed at concessional rates that are frequently much lower than the marginal rates you pay outside the system. What’s more, investment returns on retirement income streams are tax free. This offers you the opportunity to reduce tax and increase your retirement savings at the same time.

If you need a refresher on the rules, take a look at our guide on how super is taxed.

Withdrawals from super are tax free from 60 unless you’ve got savings in an untaxed fund or are receiving a significant defined benefit pension.

Super money invested in a lifetime income stream reduces the amount counted in Centrelink’s means tests, and super in the accumulation phase is not assessed at all while the account holder is below age 67. As a result, holding money in one of these options can increase any means-tested Centrelink payments you (or your spouse) receive including Age Pension and Disability Support Pension.

All this can make moving money into super a very attractive proposition.

Contribution options for those under 75

While you’re not yet 75, all types of contributions to your account are permitted. This includes:

• Employer super guarantee (compulsory employer contributions)
• Additional contributions your employer chooses to make
• Salary sacrifice
• Personal non-concessional contributions
• Spouse contributions (from your spouse into your account)
• Downsizer contributions from the sale of your home
• Personal tax-deductible contributions

To make personal tax-deductible contributions after reaching 67, you need to meet the work test or be eligible for the work-test exemption, described next. No other contribution types require you to meet the work test, so being retired is not a barrier.

You have access to the same annual contribution caps as people of any other age, as well as the opportunity to use the bring-forward rule for non-concessional contributions and carry-forward arrangement for concessional contributions to contribute more than the standard caps.

For 2024–25, the annual concessional cap is $30,000 while the non-concessional cap is $120,000. If your total super balance is equal to or more than the general transfer balance cap ($1.9 million for 2024–25) on 30 June, your non-concessional cap for the following financial year is zero.

Downsizer contributions don’t count towards contribution caps, so you can add these even if your total super balance has breached the $1.9 million limit.

The work test

The work test requires you to be gainfully employed (in paid work) for a minimum of 40 hours in a period of 30 consecutive days at least once during the financial year you wish to make the contribution. Prior to July 2022 the work test applied to a wide range of super contributions, but now needs to be met only for personal tax-deductible contributions.

If you can’t meet the work test this financial year but your total super balance on 30 June was less than $300,000 and you satisfied the work test requirements last financial year, you can make personal tax-deductible contributions in the current financial year by using the work test exemption. The exemption only applies in the first year after you last met the work test.

Contribution options when you’re over 75