Superannuation re-contribution, also known as a re-contribution strategy, happens when you withdraw part or all of your super balance then put it back in as a non-concessional contribution.
A re-contribution strategy is where someone takes money out of their superannuation fund and then puts it back in as a non-concessional contribution. Non-concessional contributions are made without claiming a tax deduction.
As the name implies, a recontribution strategy refers to the withdrawal of a lump sum of money from your super balance and returning it as an eligible non-concessional (after-tax) contribution. You can remove part, or all your superannuation and make contributions in a lump sum, or in increments over a longer period.
The bring-forward rule enables you to accelerate your super contributions by using up to three years' worth of non-concessional (after-tax) contributions caps in a single year. This means you could contribute up to three times the annual limit in one go, or spread your contribution out over two to three years.
When you reach your preservation age and retire, you can usually withdraw your super or turn it into an income stream. If you want to keep working, you can start a Transition to Retirement account instead.
Am I eligible to use my super to pay off my debts? You may be able to access your super early in limited circumstances: in broad terms, on the grounds of severe financial hardship or for compassionate reasons. Before applying, it's important to understand the long-term impact.
The top ten financial mistakes most people make after retirement are:
Currently the transfer balance cap is $2 million. After you retire any amounts over the cap need to be transferred into an accumulation account or withdrawn taken out as a lump sum. Earnings on any excess amount in your retirement account are taxed at 15%.
You can continue to contribute to super until you turn 75. Superannuation contribution limits continue to apply and those aged 67-75 will need to meet a work test if you intend to claim a taxation deduction in relation to personal contributions made to super.
If you're under 75 years of age you can continue to contribute to your super fund regardless of whether you are still working or not. You can make personal contributions for up to 28 days after the end of the month that you turn 75, but after that you can only make 'downsizer contributions'.
The age at which you can access your super. This is between 55 and 60, depending on when you were born. You must also meet a condition of release. You pay 22% (including the Medicare levy) or your marginal tax rate, whichever is lower.
You can apply once to withdraw up to $10,000 (less tax of up to 22%) in any 12-month period if: you haven't received a financial hardship payment from any superannuation fund within the last 12 months; and.
You can get Social Security retirement benefits and work at the same time. However, if you are younger than full retirement age and make more than the yearly earnings limit, we will reduce your benefits. Starting with the month you reach full retirement age, we will not reduce your benefits no matter how much you earn.
You can access your super early in very limited circumstances, including to pay certain expenses on compassionate grounds, as well as terminal illness, incapacity and severe financial hardship. For information on how to save money for your first home inside your super fund, see First home super saver scheme.
Using your super to pay off the mortgage can reduce financial pressure and give you long-term security. It might also improve your future eligibility for the Age Pension. Further to this, reducing your mortgage decreases the total amount of interest paid over the duration of the mortgage.
If you retire at age 60 with $500,000, you could cover retirement expenses of $43,000 (increasing with inflation) until age 95 if you are single, and $52,000 until age 95 if you are a couple.
$1 million is enough for a comfortable retirement if you retire at age 65. This will provide a single person with an income of $60,000 p.a. and a couple with $77,000 p.a., including Age Pension for around 30 years, based on an investment return of 6% p.a. and 3.0% p.a. inflation.
From 20 September 2025, the full pension is available, under the assets test, for homeowner singles whose assessable assets are under $321,500 – for homeowner couples the number is $481,500.
You could retire at 60 with 500k, but it depends on what sort of retirement lifestyle you hope to enjoy. If you are happy to spend frugally throughout your retirement years, a £500K pot will go a fair way towards securing a reasonably comfortable retirement.
If you plan to retire at 55, you'll face a gap until you reach preservation age (60), when super becomes accessible. To cover those early years, you'll need to rely on savings or investments outside of super. With $700,000, you could draw approximately: $50,000 p.a. (for singles), until age 95.
Can you retire on $800k? Yes, $800k provides a healthy nest egg that allows for annual withdrawals of around $60,000 or below, spanning 20 years. If this is sufficient to cover your retirement lifestyle, then $800k gives you an adequate buffer.
Not Saving Enough
If there's one regret that rises above all others, it's this: not saving enough. In fact, a study from the Transamerica Center for Retirement Studies shows that 78% of retirees wish they had saved more.
When asked when they plan to retire, most people say between 65 and 67. But according to a Gallup survey the average age that people actually retire is 61.
In 2018, Certified Financial Planner Wes Moss wrote this: “For every $1,000 per month you want to have at your disposal in retirement, you need to have $240,000 saved.” (Source: WesMoss.com). He called this “The 1,000 Bucks-A-Month Rule.”