Turning 60 is now the pivotal moment in Australian superannuation. Following the completion of the long phase-in of preservation age, 60 is the preservation age for everyone — the age at which access to super becomes possible, provided a condition of release is met. For members of a self-managed super fund, the 60th birthday unlocks choices that can materially change how their retirement savings are taxed, potentially shifting fund Earnings from 15% to nothing and making pension income entirely tax-free. It does not happen automatically, and it does not require full retirement in every case. Understanding precisely what 60 unlocks — and what it does not — is essential for SMSF trustees planning the transition from building Wealth to drawing on it.

 

Preservation age is now 60 for everyone

For years, preservation age crept up in stages depending on date of birth. That phase-in is finished. Everyone born on or after 1 July 1964 has a preservation age of 60, and the final cohort reached 60 by 1 July 2024. In practical terms, no Australian now has a preservation age below 60, and none has one above it. Reaching 60 is therefore the gateway event across the whole system. But reaching preservation age alone is not enough to access super — a condition of release must also be satisfied.

 

The conditions of release available at 60

At 60, several conditions of release become available. A member can access their super by permanently retiring after reaching preservation age. Alternatively — and this is a distinct trigger — a member can access super by ceasing an employment arrangement on or after age 60, even if they intend to keep working in another role. Permanent incapacity, terminal medical condition and death are separate conditions that can apply at any age. The point is that at 60 a member has genuine, work-related pathways to full access, whereas before 60 those pathways generally do not exist.

 

Pension payments become tax-free from 60

The tax headline of turning 60 is straightforward and powerful: pension payments to a member aged 60 or over from a taxed fund are tax-free. They are not included in assessable income and do not need to be declared. This applies to income drawn from a retirement-phase account-based pension. Before 60, pension payments could carry a taxable element assessed at marginal rates with an offset; from 60, for a taxed fund, that complexity falls away. For SMSF members, this is often the difference between a pension that is simple and tax-free and one that must be reported and taxed.

 

The choice: TRIS or a retirement-phase pension

At 60, a member who has met a full condition of release can start a retirement-phase account-based pension, where the SMSF’s earnings on the supporting Assets are Exempt Current Pension Income taxed at 0% and payments are tax-free. A member who is still working and has not met a full condition of release can instead start a transition to retirement income stream (TRIS).

The distinction matters for tax. A pre-retirement TRIS lets a member aged 60 draw between 4% and 10% of the 1 July balance while still working, but the fund’s earnings on the TRIS assets are still taxed at 15%, not 0%. Only a retirement-phase pension delivers the 0% earnings rate. A TRIS later converts to retirement phase when the member meets a full condition of release — for example, retiring, ceasing employment, or reaching 65 — at which point earnings become tax-free and the stream begins counting towards the transfer balance cap.

 

Limits and the transfer balance cap

Moving super into the tax-free retirement phase is subject to the transfer balance cap, a per-person limit across all super. It was $2 million in 2025–26 and was indexed to $2.1 million from 1 July 2026. A member starting their first retirement-phase pension after that date, who has never previously held one, receives the full $2.1 million personal cap. A retirement-phase account-based pension also carries a minimum annual drawdown — 4% for members under 65 — which rises with age. These limits frame how much of a member’s super can enjoy the 0% earnings environment and how much income must be drawn each year.

 

Worked example (hypothetical)

Consider Yvonne, a hypothetical SMSF member who turns 60 and stops full-time work but keeps a casual consulting role. Because she has ceased an employment arrangement after 60, she meets a full condition of release and starts a retirement-phase account-based pension of $900,000. Her SMSF now pays 0% tax on the earnings of the assets backing that pension, and her pension payments are tax-free. Had she instead kept her full-time role and started a TRIS, the fund would still pay 15% on those earnings until she later met a full condition of release. This example is an illustration only and not personal advice.

 

What SMSF trustees need to know

Commencing a pension is a formal event for an SMSF. Trustees generally need to document the pension commencement, value the assets supporting it, ensure the minimum drawdown is paid each year, and report through transfer balance account reporting where a retirement-phase pension begins. Failing to pay the minimum can cost the fund its ECPI exemption for the year. Where the fund runs both accumulation and pension interests, careful record-keeping keeps the tax treatment of each clear.

 

Key Takeaway

Age 60 is now the universal preservation age. Reaching 60 plus a condition of release — permanently retiring, or ceasing an employment arrangement on or after 60 — unlocks access to super. Pension payments from a taxed fund become tax-free from 60. A member still working may start a TRIS, whose earnings are taxed at 15%, while a retirement-phase account-based pension delivers 0% earnings tax, subject to the transfer balance cap of $2.1 million from 1 July 2026.