Super lump sum

You may be able to take your superannuation as a lump sum payment when you retire. This is usually tax-free from age 60.

How a superannuation lump sum works

Depending on your fund’s rules, you may be able to withdraw some or all of your superannuation (super) as a lump sum. If so, you can take all your super in one go, or as several lump sum payments.

Ways of using a lump sum include:

  • clearing debt (for example, paying off your mortgage)
  • investing for your retirement
  • paying for something you couldn’t previously afford (such as home improvements)

Getting your super

You can get your super when you retire and reach your ‘preservation age’. This is between 55 and 60, depending on when you were born. Or when you reach age 65, even if you are still working.

Getting the Age Pension

What you do with your lump sum after you withdraw it may affect your eligibility for the Age Pension.

To find out how a lump sum could affect your entitlements, talk to a Services Australia Financial Information Service (FIS) officer.

Financial and tax advice

Get financial advice from your super fund or a licensed financial adviser before withdrawing your super. You can speak to us.

The Australian Taxation Office (ATO) website has information about how your super payout is taxed.

Pros and cons of taking a lump sum

Consider the pros and cons to decide if taking a super lump sum is right for you.

Pros

If you take a lump sum, you can:

  • pay low or no tax on the lump sum if you are 60 or over
  • reduce or clear debts which can save you money in the long run
  • treat yourself to something that wasn’t affordable before, such as home renovations, travel or a car
  • withdraw money as you need it, in several lump sums. This could reduce the tax you pay and maximise your Age Pension, depending on your age
  • invest the lump sum outside super, and have access to your money for your short to medium-term needs

Cons

However, you may:

  • pay more tax on interest from investments or deposits
  • pay tax on capital gains if you buy and sell property
  • have a lower future income if you spend a portion of your super now
  • be tempted to splurge or overspend so your money runs out faster

Investing a lump sum

If you decide to invest a lump sum, you need to consider your financial goals, investing time frame and risk tolerance.

Using a mix of retirement income options

You don’t have to take an all or nothing approach with your retirement income.

Taking some of your super as a lump sum could give you access to money for planned activities. For example, paying for a holiday or medical expenses.

You could keep the rest in a retirement income stream, to give you a regular payment you can rely on. Income stream options include an account-based pension or annuity.

Case study

Alisha uses a mix of options.

Alisha is 67 and is retiring with $330,000 in super. She decides to take out a $40,000 lump sum to pay for home improvements.

She transfers the rest of her super to an account-based pension. By investing $290,000 in an income stream, Alisha will receive regular income payments on top of the Age Pension.

She still has the flexibility to withdraw another lump sum in the future if she needs to.

Source: Reproduced with the permission of ASIC’s MoneySmart Team. This article was originally published at https://moneysmart.gov.au/retirement-income/super-lump-sum
Important note: This provides general information and hasn’t taken your circumstances into account.  It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.  Past performance is not a reliable guide to future returns.
Important
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

Praise Baroña

Client Services Officer

Praise Barona is a Customer Service Officer at Investlink Group and a Bachelor of Science in Accountancy graduate. She brings a well-rounded background in financial planning support and accounting, with experience as a Financial Planning Assistant and as an intern in a CPA firm.

Through these roles, she has developed strong attention to detail, organisation, and a thoughtful approach to supporting both clients and advisers.

Praise is passionate about delivering a positive and reliable client experience, and is committed to continuing her growth in the financial planning industry.

Lindsay Austria

Marketing Officer

Lindsay Austria is a Marketing Officer at Investlink Group and is currently completing a Bachelor of Commerce (International Business and Marketing) at the University of Sydney.

She brings experience in digital marketing, content creation, and community engagement.

With a passion for storytelling and cross-cultural connection, Lindsay focuses on creating meaningful content that resonates with diverse audiences and builds genuine engagement.

Mary Yousif

Administrative Officer

Mary is a Financial Planning Administrative Officer at Investlink Group, holding a Bachelor of Business with a major in Finance and Management.

She brings a strong client-focused approach, supported by her experience as a Senior Receptionist and Assistant Manager, where she developed skills in communication, problem-solving, and team coordination. Mary is committed to building her expertise in the financial planning sector and contributing to a seamless and supportive client experience.

Sara Jahanbin

Advice Associate and Professional Year Candidate

Sara is an Advice Associate at Investlink Group, with over seven years of experience in the tax and financial planning industry. With a strong background in tax strategy, she brings valuable insight into structuring financial advice that aligns with each client’s broader financial goals.
 
Sara is currently completing her Graduate Diploma of Financial Planning with Kaplan Professional and is working towards becoming a licensed financial adviser. She is dedicated to providing holistic, client-centered support and manages the advice process end to end, ensuring clients receive clear, strategic, and tailored outcomes.

Priyanka Kumar

Financial Adviser

Priyanka is a financial adviser with experience across various areas of advice including superannuation and retirement planning, wealth creation and personal insurance. Her education includes a Bachelor of Applied Finance from Macquarie University and a Graduate Diploma of Financial Planning from Kaplan.

Priyanka enjoys strategising and working towards creating valuable solutions for our clients. She loves meeting our clients, both existing and new, and getting to know them on a personal level and hearing the unique stories they have to share.

Ashish Thadani

Director & Financial Adviser

Financial Adviser / Director of Investlink Group & Excalibur Wealth Group

Ashish has over 20 years of experience as a financial adviser and is passionate about educating his clients on their finances and the financial strategies that he recommends to them.

With a “client comes first” philosophy for the business, Ashish operates with patience, transparency and with the best interests of his clients always in mind.

Authorised Representative No. 290396

Investlink Group Pty Ltd Corporate Authorised Representative No. 442305