Retirement is a stage of life when you can enjoy the fruits of your labor. To ensure a secure and comfortable retirement, it is important to save for the future and make smart investments. One of the most popular options for retirement savings is superannuation, also known as a super fund. Superannuation is a form of long-term savings where employers contribute to a fund on behalf of their employees. The money in the fund can then be used to provide income during retirement. One of the key benefits of superannuation is that you can withdraw money from the fund tax-free. In this article, we will discuss how much you can withdraw from your superannuation tax-free.
Tax Free Super Withdrawal Amounts
The amount you can withdraw from your superannuation tax-free depends on your age and the type of contribution you have made. Generally speaking, if you are under the age of 60, you can withdraw up to $25,000 per financial year. This amount is known as the ‘low rate cap’. If you are over the age of 60, you can withdraw up to $100,000 per financial year without incurring a tax liability. This amount is known as the ‘high rate cap’.
It is important to note that the low rate cap applies to all contributions made to the fund, including employer contributions. However, the high rate cap only applies to contributions made by you personally. Employer contributions are not eligible for the high rate cap.
Understanding Your Options
Before you decide to withdraw money from your superannuation, it is important to understand the implications of doing so. For example, if you are under the age of 60, you will only be able to withdraw up to $25,000 per financial year. If you withdraw more than this amount, you will incur a tax liability. Similarly, if you are over the age of 60 and you withdraw more than $100,000, you will also incur a tax liability.
It is also important to consider the long-term implications of withdrawing money from your superannuation. For example, if you are under the age of 60 and you withdraw $25,000 in one financial year, you will not be able to withdraw any more money from the fund until the following financial year. This could have an impact on your retirement savings in the long term.
In summary, it is possible to withdraw money from your superannuation tax-free. However, it is important to understand the implications of doing so before