Superannuation is designed for retirement, but access to it isn’t limited strictly to being retired. Partial access is allowed earlier.

Unrestricted access to super is available any time after age sixty if retired, and from age 65 if still working. However from age sixty working people can set up pre-retirement pensions that pay them income payments of up to ten per cent of the account balance each year.

The tax on earnings within the accounts remains at fifteen per cent, the same as super accumulation accounts. The pension payments to the fund member are tax free.

However, drawing income payments doesn’t sound smart when people are trying to build up their super quickly as they approach retirement, especially if they don’t need the income.

What could they do with extra tax-free income? Perhaps they still have a mortgage they need to finalise. They could use the extra income to pay that off, or other debts they may have. They could pay for overdue home repairs and maintenance.

They could sacrifice more of their income into superannuation. That would save tax and build their super faster. Taking an income from super and then putting it back in super again certainly sounds strange. However, doing so saves tax.

When a person sacrifices part of their salary into super it is contributed from pre-tax income. No income tax is deducted so they save tax at their marginal rate, commonly 32 per cent or more. There is a low 15 per cent contribution tax applied on entering the super fund so they save 17 per cent net, or more.

Employer super guarantee payments and salary sacrifice payments are called concessional contributions. They are limited to $30,000 per annum. For instance, if employer payments were $10,000 a worker could sacrifice up to $20,000. A 17 per cent tax saving on that will be $3,400. Very Handy.

People whose super balances were under $500,000 at June 30 last, are eligible to make catchup contributions. These are amounts the person was eligible to contribute in the last five financial years, but didn’t. How much extra each person is entitled to put in can be found via their MyGov account.

At June 30 this year the eligible amount for the earliest year, financial year 2019-20, will drop off. It makes sense to put extra in super now to ensure that opportunity isn’t lost.

If a person has no spare savings, they could set up a pre-retirement pension now and live off the income while sacrificing the whole of their salary into super until June 30. Alternatively, they could draw up to ten per cent as a lump sum, recontribute it, and claim a tax deduction.