advertising

How much tax is payable on withdrawing super if you’re under 60?

John Wasiliev

Reader’s question: I withdrew my superannuation a few months before I turned 60. Am I liable to pay tax on it?

Assuming you are eligible to make a withdrawal from super, you will be liable for tax on savings greater than $165,000.

Tax-free super benefits are only available after the age of 60.

Taxable super is made up of savings that came from tax concessional contributions or investment earnings.

Deborah Wixted of Colonial First State says the rate of tax you will pay on taxable lump sums above $165,000 is 16.5 per cent.

Super made up of after-tax contributions or tax-free contributions is not taxed.

To withdraw super, you must satisfy what is described as a condition of release.

The most common condition of release for a lump sum withdrawal before the age of 65 is that you have retired from the workforce and are at least 55 years old.

Wixted says that if your super was more than $165,000 and the benefit was paid from an employer super fund, tax should have been withheld. If tax is due, a super fund is required to withhold tax on a withdrawal and you will need to include this information in your annual tax return.

It is very important that you were eligible to make a withdrawal from super. If you withdrew money from a DIY fund, for instance, but were not eligible to do so because you were still working, you could be taxed at the highest personal tax rate of 46.5 per cent.

Follow us on Facebook and Twitter

You can follow Smart Investor on Twitter: https://twitter.com/#!/smartinvestr (or @smartinvestr) and on Facebook at facebook.com/afrsmartinvestor

Comments

Market Summary

Price % Chg
BCI BCIRON $ 0.505 + 20.24%
SIR SIRIUS RES $ 2.670 + 13.62%
LYC LYNAS $ 0.055 + 12.24%
MRM MMAOFFSHOR $ 1.160 + 12.08%
SEA SEA LTD $ 0.475 + 11.76%
SXY SENEX $ 0.345 + 9.52%
MGX MT GIBSON $ 0.240 + 9.09%
FLT FLIGHT CTR $ 31.870 - 9.05%
SKE SKILLED GL $ 1.160 + 8.92%
MND MONADEL $ 8.980 + 8.72%

Commodities

Price Change % Chg
BRENT SPOT (USD/BBL) 60.030 0.000 0.00%
LIGHT CRUDE JAN5 (USD/BBL) 56.720 + 0.250 + 0.44%
NAT GAS JAN15 (USD/MMBTU) 3.686 - 0.016 - 0.43%
Bid Ask Bid Chg Bid % Chg
GOLD (USD/OZ) 1199.10 1199.85 + 10.90 + 0.92%
SILVER (USD/OZ) 16.02 16.07 + 0.33 + 2.10%
PLATINUM (USD/OZ) 1204.00 1207.00 + 17.50 + 1.47%
PALLADIUM (USD/OZ) 786.00 789.00 + 10.37 + 1.34%

Markets Data »

Currencies

AUD USD EUR JPY GBP
AUD AUD 0.819 0.6647 97.09 0.5238
USD 1.2204 USD 0.8116 118.54 0.6397
EUR 1.5035 1.2317 EUR 146.03 0.788
JPY 0.0103 0.0084 0.0068 JPY 0.0054
GBP 1.9074 1.5629 1.2686 185.27 GBP

Markets Data »

Stock price lookup

My Watchlists

You need to be logged in to see your watchlists.

My Portfolios

You need to be logged in to see your portfolios.